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The General Educational Development (GED) credential is a credential that individuals in the United States and Canada who have not received a regular high school diploma may pursue. The GED was introduced in 1942 in the United States as a credential for World War II veterans who entered the military before completing high school. However, by the end of the 1950s, more nonveterans were taking the test than veterans. The GED test has been revised three times to keep it more current with educational requirements and job skills. It is a battery of five tests that takes approximately 7 hours to complete. The GED tests aptitude in four subjects: language arts, mathematical reasoning, science, and social studies. The 2002 revision made the test more difficult, and the number of test takers and pass rates dropped. In 2001, roughly 945,000 completed the exam, with a 69-percent pass rate, while in 2002, the number of those who completed the exam dropped to around 603,000, and the pass rate fell to 60 percent.
More recently, in 2013 in the United States, about 714,000 completed the GED test, with a pass rate of 75.7 percent. In Canada in 2013, 10,238 completed the exam, with a pass rate of 62.2 percent. Currently, most states require that individuals who take the test be 18 or 19 years old. However, with some exceptions (e.g., individuals who are homeschooled, expelled from school, or serving in an adult correctional facility), the minimum age is 16 years in many states. In the United States, the cost of taking the GED exam ranges from $120 to $155 depending on the state, except for New York, where the exam is free.
In the United States in 2013, 19.2 percent of test takers were between 16 and 18 years of age, 34.5 percent were between 19 and 24 years, and 46.3 percent were 25 years and older. Among those who passed the test, 22.4 percent were between 16 and 18 years of age, 35.1 percent were between 19 and 24 years, and 43.5 percent were 25 years and older. So those who were 25 years and older had somewhat lower pass rates. In 2013, 51.7 percent of GED test takers were male; 43.3 percent were white, 26.4 percent were African American, and 24.9 percent were of Hispanic origin. Among GED test takers in 2013, 18.1 percent had completed 9th grade, 26.1 percent had completed 10th grade, 33.3 percent had completed 11th grade, and 11.1 percent had completed 12th grade, with the remainder having completed less than 9 years of schooling.
GED pass rates vary by gender and race/ethnicity. In 2013, 79.1 percent of males and 71.1 percent of females passed the GED. The GED pass rate for whites was 85.8 percent in 2013, while the pass rates for African Americans was 61.8 percent, and the pass rate for those of Hispanic origin was 71.8 percent.
The GED is designed to be a high school equivalency credential, and in many states the name of the credential reflects this. For example, in Ohio, the credential is called the Ohio High School Equivalency Diploma, while in Utah the name is the Utah High School Completion Diploma. However, empirical evidence shows that among individuals who do not enter postsecondary education, those with a GED credential have worse labor market outcomes than those with a regular high school diploma. In fact, among males, the labor market outcomes of those with a GED credential are not very different from the labor market outcomes of high school dropouts.
While many GED test takers report that they are taking the test to pursue some form of postsecondary education, the facts prove otherwise. In 2013, 53.5 percent of test takers stated that one reason for taking the exam was to continue their education at a 2-year or 4-year college. However, in a recent study conducted by the GED testing service, of the 1,000 randomly selected test passers, only 31 percent ever enrolled in a postsecondary institution, and among those who did enroll, 77 percent enrolled for only one semester.
For females, the distribution of cognitive ability (based on the Armed Services Vocational Aptitude Battery results and data from the 1979 National Longitudinal Survey of Youth) for those with a GED but no college looks similar to the distribution of cognitive ability for those with a regular high school degree but no college and is shifted to the right of the distribution for high school dropouts. For males, the distribution of cognitive ability for those with a GED but no college is shifted to the right of the distribution of cognitive ability for high school dropouts but to the left of the distribution for those with a regular high school diploma but no college.
However, there is also some empirical evidence using data from the 1979 National Longitudinal Survey of Youth to suggest that for males the noncognitive ability distribution (which is derived from measures of early violent crime, minor crime, marijuana use, regular smoking, drinking, and early sexual intercourse) for those with a GED but no college is lower than that for both high school dropouts and regular high school graduates with no college. For females, the distribution of noncognitive ability for those with a GED but no college is similar to that for high school dropouts and lower than the distribution for those with a regular high school diploma but no college.
Since both cognitive and noncognitive abilities are important for employers because of their influence on worker productivity, a GED may give a “mixed signal” for males. While males with GEDs (and no college) have higher cognitive abilities than high school dropouts, they also have lower noncognitive abilities than high school dropouts. On the other hand, females with a GED (and no college) have higher cognitive abilities than high school dropouts and similar noncognitive abilities.
There is some recent empirical evidence that indicates that the availability of the GED option leads to higher high school dropout rates. For example, the 1997 increase in the national minimum difficulty for passing the GED required some states to increase their passing standards in order to be compliant. Using states that were already in compliance with the national minimum as the control group and those needing to increase their passing standards as the treatment group, a comparison of the treatment and control states in terms of the change in high school dropout rate postincrease versus pre-increase of the national minimum yielded the finding that the GED increased dropout rates by 1.3 percentage points. In 1974, California became the last state to adopt the GED. When compared with other states, the graduation rate in California decreased by 3.1 percentage points after the GED was introduced. Finally, using longitudinal data on the GED options program introduced at the school district level in Oregon, a school-sanctioned program that offers GED preparation and certification in high schools for students at high risk of dropout, showed a 4-percent drop in high school graduation rates since the program was implemented.
Finally, given the empirical nonequivalence between the GED credential and a high school diploma, combining the two when calculating statistics, such as high school graduation rates, can be misleading. For example, when combined, the high school graduation rate has increased slowly but steadily over the past 40 years. However, using only regular high school diplomas when calculating graduation rates shows decreasing high school graduation rates until about 2000, with increases thereafter, with high school graduation rates being stagnant over a 40-year period. Calculating high school graduation rates using both GED credentials and regular high school diplomas shows a black-white high school graduation gap converging over a 40-year period ending around 2005. Using only regular high school diplomas when calculating high school graduation rates results in the narrowing of the black-white gap in high school graduation rates.
- GED Testing Service. 2013 Annual Statistical Report on the GED® Test. GED Testing Service LLC, 2014. http://www.gedtestingservice.com/uploads/files/5b49fc887db0c075da20a68b17d313cd.pdf
- Heckman James, John Humphries, and Nicholas “The GED.” In Handbook of the Economics of Education, vol. 3, Eric Hanushek, Stephen Machin, and Ludger Woessmann, eds. Amsterdam, Netherlands: North-Holland, 1999.
- Heckman James, John Humphries, Paul LaFontaine, and Pedro Rodríguez. “Taking the Easy Way Out: How the GED Testing Program Induces Students to Drop ” Journal of Labor Economics, v.30/4 (2012).