Are High School Diplomas Worth It?

The acronym GED stands for General Educational Development, not general equivalency diploma, for which it is often mistaken. Beyond the name, there is no mistaking the lack of equivalency between holders of the GED and holders of a high school diploma. Many indicators soundly show that holders of the GED fall behind their diploma-holding counterparts. The following are a few examples concerning future outcome differences:

• High school graduates earn, on average, about $1,600 a month more than those with a GED (Bureau of Labor Statistics, 2012).
• Less than 5% of those with a GED receive a bachelor's degree, compared to the 33% of those with diplomas that do (U.S. Census Bureau), which is supported by several studies showing that high school graduates are more prepared for college and score higher on placement tests than holders of the GED (National Bureau of Economic Research).
• 77% of GED holders do not continue past the first semester of college (American Council of Education study ).
• The military limits the number of accepted and requires higher scores on aptitude test for GED holders, because the military service dropout rates for GED holders is 45% compared to 24% for high school graduates.

The stigma connected with GED holders is not present for diploma holders, and that is the stigma of being a dropout, of lacking persistence, or of taking short cuts. This accounts partly for the large difference in wages between the two groups. Plus, many institutions view the robust education gained by years spent full-time in school cannot be garnered by the taking of a day-long test, nor indicated by it. “Whatever differences are found among exam-certified equivalents, high school dropouts and high school graduates are accounted for by their years of schooling completed. There is no cheap substitute for schooling.” (Cameron & Heckman, National Bureau of Economic Research Paper No.3804, "The Nonequivalence of High School Equivalents”).

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Many studies for the National Bureau of Economic Research lamented the fact that the number of students choosing to leave school and get a GED was rising because the students weren't aware of how devastating that decision could be. As of 2008, 12% (500,000 dropouts) of high school credentials issued that year were for those passing the GED (Heckman, Humphies, & Mader, NBER Working Paper No. 16064, "The GED”). The same study stated that while it had been demonstrated through much research that GED holders and graduates had equivalent abilities to learn--scholastic aptitude--those with the GED were found to be deficient in noncognitive skills, such as persistence, motivation, and reliability. Employers are afraid that whatever traits lead them to drop out of high school will lead them to other irresponsible behaviors in the work place.

However, for all the wage, labor market, and higher education differences there are between GED holders and diploma holders, there are just as stark differences in all areas between GED holders and high school dropouts who did not attain a GED. Hence, the difference between a high school graduate and a non-credentialed high school dropout is enormous.

If you have dropped out of high school and are trying to figure out what to do, these remarkable differences that stay consistent throughout life (National Bureau of Economic Research), should clearly point you in the direction of pursuing a high school diploma.

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