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

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

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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File URL: http://www.nber.org/papers/w7101.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 7101.

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Date of creation: Apr 1999
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Publication status: published as Tyler, John H., Richard J. Murnane and John B. Willett. "Do The Cognitive Skills Of School Dropouts Matter In The Labor Market?," Journal of Human Resources, 2000, v35(4,Fall), 7480754.
Handle: RePEc:nbr:nberwo:7101
Note: LS
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  1. Henry S. Farber & Robert Gibbons, 1991. "Learning and Wage Dynamics," NBER Working Papers 3764, National Bureau of Economic Research, Inc.
  2. 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.
  3. Joseph G. Altonji & Charles R. Pierret, . "Employer Learning and the Signaling Value of Education," IPR working papers 96-11, Institute for Policy Resarch at Northwestern University.
  4. Joshua D. Angrist, 1995. "Estimating the Labor Market Impact of Voluntary Military Service Using Social Security Data on Military Applicants," NBER Working Papers 5192, National Bureau of Economic Research, Inc.
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