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Do the Cognitive Skills of School Dropouts Matter in the Labor Market?

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  • John H. Tyler
  • Richard J. Murnane
  • John B. Willett

Abstract

Does the U.S. labor market reward cognitive skill differences among high school dropouts, the members of the labor force with the least educational attainments? This paper reports the results of an exploration of this question, using a new data set that provides information on the universe of dropouts who last attempted the GED exams in Florida and New York between 1984 and 1990. The design of the sample reduces variation in unmeasured variables such as motivation that are correlated with cognitive skills. We examine the labor market returns to basic cognitive skills as measured by GED test scores. We explore whether the returns differ by gender and race. The results indicate quite large earnings returns to cognitive skills for both male and female dropouts, and for white and non-white dropouts. The earnings payoff to skills increases with age.

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  • John H. Tyler & Richard J. Murnane & John B. Willett, 1999. "Do the Cognitive Skills of School Dropouts Matter in the Labor Market?," NBER Working Papers 7101, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:7101
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    1. Joseph G. Altonji & Charles R. Pierret, 1998. "Employer Learning and the Signalling Value of Education," Palgrave Macmillan Books, in: Isao Ohashi & Toshiaki Tachibanaki (ed.), Internal Labour Markets, Incentives and Employment, chapter 8, pages 159-195, Palgrave Macmillan.
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    4. John H. Tyler & Richard J. Murnane & John B. Willett, 1998. "Estimating the Impact of the GED on the Earnings of Young Dropouts Using a Series of Natural Experiments," NBER Working Papers 6391, National Bureau of Economic Research, Inc.
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    2. Mane, Ferran & Miravet, Daniel, 2016. "Using the job requirements approach and matched employer-employee data to investigate the content of individuals' human capital," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 49(2), pages 133-155.
    3. Niels-Hugo Blunch & Claus C. Pörtner, 2011. "Literacy, Skills, and Welfare: Effects of Participation in Adult Literacy Programs," Economic Development and Cultural Change, University of Chicago Press, vol. 60(1), pages 17-66.
    4. Woessmann, Ludger, 2004. "How Equal Are Educational Opportunities? Family Background and Student Achievement in Europe and the United States," IZA Discussion Papers 1284, Institute of Labor Economics (IZA).
    5. Christopher Jepsen & Peter Mueser & Kenneth Troske, 2016. "Labor Market Returns to the GED Using Regression Discontinuity Analysis," Journal of Political Economy, University of Chicago Press, vol. 124(3), pages 621-649.
    6. McIntosh, Steven & Vignoles, Anna, 2001. "Measuring and Assessing the Impact of Basic Skills on Labour Market Outcomes," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 453-481, July.
    7. Laura Romeu Gordo & Andreas Motel-Klingebiel & Susanne Wurm, 2009. "SOEP as a Source for Research on Ageing – Issues, Measures and Possibilities for Improvement," RatSWD Working Papers 83, German Data Forum (RatSWD).
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    9. Daniel Parent, 2006. "Work while in high school in Canada: its labour market and educational attainment effects," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 39(4), pages 1125-1150, November.
    10. Vegard Skirbekk, 2004. "Age and Individual Productivity: A Literature Survey," Vienna Yearbook of Population Research, Vienna Institute of Demography (VID) of the Austrian Academy of Sciences in Vienna, vol. 2(1), pages 133-154.
    11. Stefanie Dufaux, 2012. "Assessment for Qualification and Certification in Upper Secondary Education: A Review of Country Practices and Research Evidence," OECD Education Working Papers 83, OECD Publishing.
    12. Katja Coneus & Johannes Gernandt & Marianne Saam, 2009. "Noncognitive Skills, School Achievements and Educational Dropout," SOEPpapers on Multidisciplinary Panel Data Research 176, DIW Berlin, The German Socio-Economic Panel (SOEP).
    13. Wößmann, Ludger, 2001. "New Evidence on the Missing Resource-Performance Link in Education," Kiel Working Papers 1051, Kiel Institute for the World Economy (IfW Kiel).
    14. Katja Coneus & Johannes Gernandt & Marianne Saam, 2011. "Noncognitive Skills, School Achievements and Educational Dropout," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 131(4), pages 547-568.
    15. Jovicic, Sonja, 2017. "Literacy skills, equality of educational opportunities and educational outcomes: an international comparison," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168117, Verein für Socialpolitik / German Economic Association.
    16. C. Kirabo Jackson, 2010. "Do Students Benefit from Attending Better Schools? Evidence from Rule-based Student Assignments in Trinidad and Tobago," Economic Journal, Royal Economic Society, vol. 120(549), pages 1399-1429, December.
    17. Fabo, B., 2017. "Towards an understanding of job matching using web data," Other publications TiSEM b8b877f2-ae6a-495f-b6cc-9, Tilburg University, School of Economics and Management.
    18. Tyler, John H. & Murnane, Richard J. & Willett, John B., 2004. "The devil's in the details: evidence from the GED on large effects of small differences in high stakes exams," Economics of Education Review, Elsevier, vol. 23(4), pages 339-349, August.
    19. Sulis, Isabella & Giambona, Francesca & Porcu, Mariano, 2020. "Adjusted indicators of quality and equity for monitoring the education systems over time. Insights on EU15 countries from PISA surveys," Socio-Economic Planning Sciences, Elsevier, vol. 69(C).
    20. Tyler, John H., 2004. "Basic skills and the earnings of dropouts," Economics of Education Review, Elsevier, vol. 23(3), pages 221-235, June.
    21. Fisher, Monica G., 2005. "Why Is U.S. Poverty Higher In Nonmetropolitan Than Metropolitan Areas? Evidence From The Panel Study Of Income Dynamics," Working Papers 18904, Oregon State University, Rural Poverty Research Center (RPRC).
    22. Mañé Vernet, Ferran & Miravet, Daniel, 2010. "An investigation on the pay-off to generic competences for core employees in Catalan manufacturing firms," Working Papers 2072/179595, Universitat Rovira i Virgili, Department of Economics.

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