High School Graduation, Performance, and Wages
Using data from the Panel Study of Income Dynamics and a proprietary sample of semiskilled production workers, this paper investigates the reasons for the discontinuous increase in wages associated with graduation from high school. The author finds a discontinuous decrease in workers' propensities to quit or be absent. However, he does not find that graduates have a comparative advantage in production jobs requiring more training, nor in either sample is there a discontinuous increase in required training associated with the jobs held by graduates. The wage premium associated with graduation from high school appears to be procyclical, falling during slumps. There is also some evidence suggesting that prior quits have a larger effect on the wages of graduates than on the wages of dropouts. Copyright 1988 by University of Chicago Press.