Who Values the GED? An Examination of the Paradox Underlying the Demand for the General Educational Development Credential

by Thomas M. Smith - 2003

The General Educational Development (GED) credential is the most widely recognized form of alternative secondary certification in the United States today. Unlike other educational credentials, however, GED certification does not require school attendance or mastery of any specific curriculum. Although the requirements for certification are notably different from traditional high school diplomas, the GED is widely viewed as the functional equivalent of the high school diploma. While surveys of employers have shown that they generally consider the GED equivalent to the traditional high school diploma in hiring decisions, much of the literature on the economic returns to GED attainment indicate that these returns are significantly below those of traditional high school graduates and not much higher than those of other dropouts. This article examines the paradox of strong individual demand and strong institutional support for this credential despite educational and economic returns markedly lower than those of traditional high school graduates. The literature on the history of the GED, as well as the cognitive, educational, and economic outcomes associated with it, is examined through the lenses of several economic and sociological paradigms. This article suggests that the GED's potential as a signal of a recipient's basic cognitive skills may be negated by the inability of a test-based credential to signal at least minimal internalization of institutional norms, particularly those most valued in the workplace. The analysis suggests that the GED serves as a systemic safety valve for a system with comparatively high dropout rates. The GED program is a low-cost way to integrate hundreds of thousands of off-track individuals back into the mainstream of society, while at the same time providing an efficient means for the educational system to appear to meet its goals of equality of educational opportunity.

The General Educational Development (GED) credential is the most widely recognized form of alternative secondary certification in the United States today. Unlike other educational credentials, however, GED certification does not require school attendance or mastery of any specific curriculum. Although the requirements for certification are notably different from traditional high school diplomas, the GED is widely viewed as the functional equivalent of the high school diploma. While surveys of employers have shown that they generally consider the GED equivalent to the traditional high school diploma in hiring decisions, much of the literature on the economic returns to GED attainment indicate that these returns are significantly below those of traditional high school graduates and not much higher than those of other dropouts. This article examines the paradox of strong individual demand and strong institutional support for this credential despite educational and economic returns markedly lower than those of traditional high school graduates. The literature on the history of the GED, as well as the cognitive, educational, and economic outcomes associated with it, is examined through the lenses of several economic and sociological paradigms. This article suggests that the GED’s potential as a signal of a recipient’s basic cognitive skills may be negated by the inability of a test-based credential to signal at least minimal internalization of institutional norms, particularly those most valued in the workplace. The analysis suggests that the GED serves as a systemic safety valve for a system with comparatively high dropout rates. The GED program is a low-cost way to integrate hundreds of thousands of off-track individuals back into the mainstream of society, while at the same time providing an efficient means for the educational system to appear to meet its goals of equality of educational opportunity.

In 2001, more than a million adults in the United States, Canada, and outlying jurisdictions took General Educational Development (GED) tests to earn the equivalent of a high school diploma—an estimated 15.4 million adults have earned a GED since the program’s inception in 1949 (GED Testing Service 2002). GEDs accounted for 19 percent of all high school credentials awarded by state departments of education in 2001, up from 7 percent three decades earlier (GED Testing Service 2002; U.S. Department of Education 2002). In 16 states, including New York and Florida, the ratio of GED certificates to public high school diplomas has reached one to four. Among men and women who were high school sophomores in 1980, 13.5 percent had earned a GED by 1992.1

As these statistics indicate, the GED program has become a major producer of educational credentials—expanding far beyond its original goal of providing an alternative to returning to the high school classroom for veterans whose educations were interrupted by military service during the Second World War.2 The expansion of the GED program is a significant occurrence since GEDs are awarded solely on the basis of passing a test. Few institutional barriers block high school dropouts from completing their education through the GED. A GED candidate does not have to go to class, do his or her homework, be respectful of teachers and administrators, keep out of trouble with the law, or follow any of the other institutional rules typically required of the traditional high school graduate.

Although the GED may offer a second chance for completing high school, research suggests that the educational and economic benefits of GED attainment are less than advertised. For example, although the GED Testing Service, a division of the American Council on Education (ACE), claims that more than 95 percent of U.S. employers consider GED graduates the same as traditional high school graduates in regard to hiring, salary, and opportunity for advancement (GED Testing Service n.d.), much of the widely reported research by economists finds that GED graduates have labor-market outcomes closer to non-credentialed high school dropouts than to graduates holding traditional diplomas (Cameron and Heckman 1993; Maloney 1991). And while two-thirds of GED candidates claim that they take the exam to gain access to postsecondary educational programs, their persistence and completion rates tend to be low for all but vocational programs (Boesel, Alsalam and Smith 1998).

If the GED fails to help the majority of its recipients succeed in higher education programs or to boost their economic prospects, then why does it remain so popular among dropouts and why does it receive such strong state sanction and support? Although several prominent studies by economists have pointed to the limited economic returns to GED certification (Cameron and Heckman 1993; Cameron 1994), the broader question of how this credentialing program has maintained its popularity and legitimacy at a time when the standards for awarding traditional high school diplomas have been under intense scrutiny has largely gone unexamined. This article explores this paradox by reviewing the findings of the empirical literature related to GED outcomes through the combined lenses of several economic and sociological theories linked to educational credentialing. These theoretical perspectives are used to understand and assess the individual and institutional incentives underlying GED attainment and production. While no single paradigm fully explains the successful expansion and institutionalization of the GED as an alternative to the traditional high school diploma, both functionalist and institutionalist perspectives from sociology augment the cost-benefit framework implicit in economic theory.

The first part of this article sets the stage for the theoretical discussion by briefly reviewing the history of the GED and its current status as a high school equivalency credential. Then the economics of the GED is examined, both the credential’s link to human capital investment and its potential use as a signal to employers of skills for a subgroup of dropouts. While these theories demonstrate the potential benefits and limitations of a test-based credentialing mechanism, neither can fully explain the widespread popularity of this credential in light of minimal educational and economic returns. Although economists have conducted most of the empirically based GED research to date, sociologists have for a long time sought to explain the more general mechanisms underlying educational credentialing. Components of sociological theories of social reproduction are used here to explain why employers may not react positively to the information about an individual’s skill level that the GED provides. Institutional theory is then used to help explain why dropouts might feel so strongly compelled to earn a qualification of seemingly marginal value and how this credential helps federal, state, and local educational institutions appear to meet dropout reduction goals. Finally, this multidisciplinary framework is used to forecast the future of the GED in an era of high-stakes testing and school accountability.


The GED began as a tool for reintegrating veterans whose education was interrupted by military service during the Second World War. The Roosevelt administration favored federal support for the college education of veterans returning from service to help prevent an economic depression as large numbers of soldiers returned home and to dampen public opposition to the drafting of teenagers (Quinn 1997a).3 At the time, proponents of progressive education pushed for a veterans’ credential that would reward general educational knowledge and skills as opposed to specific curricular knowledge that they felt had little practical application (Quinn 1997a). The first set of GED tests administered in 1943 was based on the Iowa Test of Educational Development, rather than on any specific curricular framework.

Colleges and universities were the primary users of the GED test results, using them to evaluate veterans without high school diplomas for admission. Educational institutions had a strong incentive to admit veterans, as the government was paying their tuition. Eighty-eight thousand veterans enrolled in higher education at the end of the war in 1945, and over 2.2 million veterans attended college under the World War II GI bill. In the late 1940s, most schools gave veterans preference over non-veterans and praised their seriousness and success in college (Quinn 1997a). While studies of the educational outcomes of GED veterans were mixed, the GED had successfully served its initial function of reintegrating war veterans into the U.S. educational system and helped to prevent widespread unemployment (Quinn 1997a).

While many schools and state departments of education were interested only in providing credit to war veterans, the American Council on Education (ACE), which both sponsors the GED and lobbies for the interests of the nation’s colleges and universities, made it clear as early as 1946 that they felt that the testing for credit strategy was applicable to non-veterans as well (Quinn, 1997a). Although most states initially rejected the use of the GED as a high school equivalency for non-veterans in the late 1940s, by 1959 more civilians than veterans were taking the test. In 1974, California became the fiftieth state to award a high school equivalency diploma recognized by institutions of higher education and employers (GED Testing Service 1999). While instituted as a program for adults, a growing number of high school age students take the GED. Between 1975 and 2000, the percentage of test takers ages nineteen or less (close to the traditional age of high school graduation) rose from 32 to 43 percent and the percentage over twenty-five years old declined from 41 to 33 percent (U.S. Department of Education 2002). The initial success of the GED as a war diploma allowed it to become integrated into the national high school credentialing framework at a time when social demand for increasing the high school completion rate was rising.


More than one million adults worldwide took one or more of the five GED Tests in 2001, the largest number in the program’s sixty-year history. Between 1942 and 2001, there were three generations of GED tests (GED Testing Service 1999, 2). The first generation of GED tests was multiple choice, requiring ten hours of administration time, with content assessed in a traditional manner—an English test focusing on the correctness and effectiveness of expression; tests of social studies, science, and literature focusing on interpreting reading material; and a fifth test measuring general mathematics ability (GED Testing Service 1999). In 1978, the GED testing time was shortened to six hours, forty-five minutes and the focus of the test shifted from assessing recall of factual knowledge to assessing conceptual knowledge, introduced in lifelike contexts. In 1988, a writing test was added, extending test administration time to seven hours, forty-five minutes (GED Testing Service 1999). The GED exam in place through 2001, the period covered by most of the analyses reviewed in this article, consists of five separate tests: (1) Writing Skills, (2) Social Sciences, (3) Science, (4) Interpreting Literature and the Arts, and (5) Mathematics—287 multiple choice items and one 45-minute essay exercise.4 Although the content assessed in the tests shifted from recall of facts to application of concepts over time, through 2001 the tests were still designed to test general knowledge and thinking skills, not knowledge of a particular high school curriculum.

The GED tests have become harder to pass over the years. While ACE sets minimum passing standards, individual states are free to set higher requirements. As of 1949, only twenty-two of the then forty-eight states had adopted scores above the ACE minimum (Dressl and Schmid, 1951). Over time, ACE raised the required minimum scores, and the states increasingly adopted passing scores above the ACE minimums. One measure of the ease or difficulty of passing a multiple-choice test is the number of correct answers above chance guessing that is needed to meet the minimum passing requirement. In 1944, the required passing score on each test was just slightly above chance, except in writing. In 1995, the required passing score was about twice the number expected by chance (Boesel et al. 1998). In January 2002, a fourth generation of GED tests was instituted. These are designed to be more closely aligned with national and state content standards. Individuals who had previously passed some, but not all, of the GED tests had to take the remaining ones by the end of 2001 or start over with the new tests (GED Testing Service 1999). The timing of the implementation of the new tests, plus an expectation that the new tests might be more difficult than the old ones, may have caused the spike in GED test-taking in 2001.

No formal preparation is required to take the GED test, although prospective test takers can take adult education courses at local school districts, colleges, and community service agencies to help them prepare. Books and practice tests are available in bookstores and libraries and a GED preparation program is carried by many cable and public television stations.

The purpose of the GED Test, as currently formulated, is

To provide an opportunity for adults who have not graduated from high school to earn a high-school level educational diploma [by demonstrating] the attainment of developed abilities normally acquired through completion of a high school program of study . . . .The credential provided by passing the GED may be used in a manner identical to a high school diploma. (GED Testing Service 1993)

The GED Testing Service refers to those who pass the exam as graduates, and the credential they earn is called a diploma or sometimes, more explicitly, a high school diploma. Through much of its history, the GED has been described as a high school equivalency credential, and most states and many federal programs formally regard it as such. GED recipients are typically counted as high school graduates in statistics of state and local educational systems and in those of federal agencies such as the U.S. Bureau of the Census (Boesel et al. 1998).

The GED expanded rapidly in the 1960s, the same time that dropping out became defined as a social problem (Dorn 1996). While it is commonly believed that dropout rates have declined since the 1960s, there is some evidence that much of this change can be attributed to dropouts earning GED credentials. Since the 1960s, most quoted dropout rates have been based on the Current Population Survey, a monthly household survey conducted by the U.S. Census Bureau. The status dropout rate is defined as the percentage of an age cohort (e.g., 16- to 24-year-olds) that is neither enrolled in school nor has completed a high school program. People who have received a GED credential are counted as high school completers (U.S. Department of Education 1999, 2002). According to this measure, the percentage of status dropouts declined from 27 percent in 1960 to 10.9 percent in 2000.

An alternative measure of high school completion is the ratio of graduates from regular day school programs to the number of 17-yearolds in the population. This measure excludes graduates from adult education programs and recipients of high school equivalency certificates, most of which would be based on passing the GED test. According to this statistic, the proportion of 17-year-olds graduating from a regular high school program increased from just over half in school year 1939–1940, to six out of ten in 1953–1954, to seven out of ten in 1962–1963, to a high of nearly eight out of ten in 1968–1969 (a ratio of 77.1; right axis of Figure 1). Over the next decade, however, this high school graduation ratio declined to about seven out of ten and has remained at this level for the past twenty years. Over the same time period, the GED increased its share of all high school credentials awarded from 7 percent in 1971 to 19 percent in 2001 (left axis of Figure 1), and the percentage of test takers within the traditional age span of high school attendance (ages 16–19) increased over this time period. Furthermore, a recent study by Duncan Chaplin (1999) indicates that state-level policies that make it easier for teenagers to get GEDs (e.g., not requiring parental permission) increases dropout rates substantially.


The popular notion that the United States makes more of an effort than other countries to educate its population through at least secondary school is also based on data that considers the GED as equivalent to the traditional high school diploma. When GEDs are removed from high school completion figures, the United States ranks well below many of its economic competitors on secondary school completion rates, including Germany, Japan, and Korea—countries that many people (falsely) believe perform better than the United States on international tests of math and science because fewer of their young people are enrolled at the secondary level. Figure 2 summarizes the distribution of secondary school completion across twenty-four industrialized countries belonging to the Organization for Economic Co-operation and Development (OECD) in 1998.Without the GED, the United States ranks in the bottom third of the distribution of secondary school completion. The dark bars stacked on top of the U.S. completion rates show how the relative ranking of the United States would change if the GED were added in. While this would not bring the United States to the top of the distribution, it would shift it into the upper half of the distribution, a place most Americans would, at a minimum, expect it to be. When the OECD released these data in its annual education indicators report Education at a Glance in 1998 (OECD 1998), the U.S. popular press reacted with surprise. A front-page story in the New York Times was titled ‘‘Long a Leader, U.S. Now Lags in High School Graduation Rate.’’ These data, combined with the previously described trends on regular high school completion, show that the GED is an integral component of popular myths of declining U.S. dropout rates and American superiority in providing basic education to all of its citizens.


The equivalence of the GED to the high school diploma was so strongly equated that it was not until 1988 that these alternative credential holders could be distinguished separately in educational attainment data collected by the U.S. Census Bureau. Furthermore, the equivalence of the GED to the regular high school diploma was taken for granted in the reporting on the U.S. National Education Goals, allowing GED completions to satisfy dropout reduction strategies. Specifically, Goal 2 of the National Education Goals states that ‘‘by the year 2000, the high school graduation rate will increase to at least 90 percent’’ (National Education Goals Panel 1994). A GED counts as a high school graduation in this goal.5 While the decision to equate the GED with the regular diploma may have been based on data availability in the CPS, the willingness to allow the GED to count as a diploma for monitoring high school completion rates is an indicator of how deeply institutionalized this alternative credential has become.

Over time, the GED has become an important second chance component of the wider education credentialing system under strong state support. Although the GED test itself is written and governed by a nongovernmental body, state involvement in awarding GEDs is substantial. All fifty states, the District of Columbia, the six U.S. territories and possessions, and most Canadian provinces and territories administer GED tests. Each state and Canadian province sets its own minimum age, residency requirements, and passing scores for awarding high school equivalency diplomas based on GED testing. Furthermore, federal and state governments tend to treat the GED as equivalent to a high school diploma in eligibility requirements for economic and social programs. For example, California law dictates that a high school equivalency diploma earned by passing the GED test is legally equivalent to a traditional high school diploma for the purpose of applying for state and local public jobs. The GED certifies ‘‘ability to benefit’’ requirements for individuals to receive federal student financial assistance to attend postsecondary education. In addition, a growing number of welfare-to-work programs have GED study as a recommended or required component. Why is there such strong institutional support for this equivalency credential? The next section describes the economics of the GED, exploring how a test-based credentialing system could potentially lead to human capital investment or simply signal the superior cognitive skills of a subset of high school dropouts. These theoretical perspectives will be used to examine both individual demand and wider institutional support for the GED.


Economic theories of educational credentialing focus primarily on cost-benefit analysis, comparing the direct and indirect costs of completing a program, which leads to an educational credential to the benefits of holding that credential. This section examines the GED in light of the two economic theories most often applied to the topic of investment in education: human capital theory and economic signaling theory. These theories are a logical place to begin, in that economists have conducted most of the empirical studies to date on the returns to the GED and these theoretical frameworks underlie the design and interpretation of these studies. These two economic perspectives will also serve as a backdrop for reviewing the available empirical data on the cognitive, educational, labor market, and other social outcomes of GED recipients, information which is important for evaluating the incentive structure underlying this alternative credentialing scheme.


Two of every three adults taking the GED test in 2000 reported that they took the test for further training and education beyond the high school level (GED Testing Service 2001). Human capital theory predicts that individuals invest in education explicitly because the skills learned in doing so will be valuable to employers (Becker 1964; Mincer 1974). Applied to the GED, human capital theory predicts that a dropout has an incentive to earn a GED if the basic skills learned in the process of studying for the exam would lead to better employment prospects. A dropout might also have an incentive to take the GED test if attaining the GED opened doors to further education and training. Human capital theory also predicts that governments and employers should provide education and training programs up to the point where the expected productivity gains derived from those programs equal the costs of providing those programs. Employers would pay GED graduates a higher wage only if the GED graduate’s skill level increased in the process of earning the qualification. The government would be expected to support and invest in the GED program to the extent that it is an efficient way to increase the productive capacity of the dropout population.

The amount of time GED examinees spend studying for the exam is one indicator of the direct investment in human capital associated with obtaining a GED. If a typical dropout spent a significant amount of time preparing to take the GED, and that preparation led to an increase in the test taker’s skill level, then employers might be expected to pay GED recipients more than other dropouts because of the skill difference created through the exam preparation process. Surveys conducted by the GED Testing Service in 1980 and 1989 asked examinees to estimate how much time and money they spent preparing for the test (see Table 1). In 1980, GED examinees spent a median twenty hours (and $10) preparing for the test. By 1989, they were spending a median thirty hours in preparation. This change was driven by a large increase in the proportion of candidates who spent over 100 hours preparing for the test—from 11.8 percent to 24.2 percent.6 Although this increase in preparation time is substantial, an investment of 30 hours is unlikely to produce the kind of increase in skills that employers would reward with a pay increase. According to some estimates, an adult learner needs approximately 100 hours of instruction to achieve a one-year gain in reading ability (Mickulecky and Lloyd 1993). Furthermore, time spent studying for the GED tends to be much less than the estimated 410 hours spent on a high school’s core curriculum in a typical school year and well under the 1,171 hours that a student might spend at school. In 2000, GED test takers had completed a mean 9.9 years of school (GEDTS 2001). With 2.1 additional years of schooling, high school graduates had 861 more hours of core curriculum than GED examinees, on average. If employers value other aspects of the of the high school experience more than just basic skill development, GED recipients may be at a disadvantage relative to other dropouts simply because they spend less time in school.


While GED preparation may help to increase the basic skill level, and thus the level of human capital, for up to a quarter of test takers, this preparation time falls far below the level of investment in education that the typical dropout would need to invest to complete a regular high school diploma. The GED would, however, be serving a human capital function if it were an effective and efficient means of helping individuals benefit from further education and training. Across a number of studies based on the National Longitudinal Survey of Youth (NLSY), over half of the GED recipients, between 50 and 63 percent, received some additional civilian education and training in degree-granting colleges, vocational schools, apprenticeship programs, or on-the-job training.7 For example, Murnane, Willett, and Boudett (1997) found that attaining a GED within four years of leaving high school was associated with an initial 2 percent increase in the probability of attending college for both males and female dropouts. The magnitude of the increases grew over the next several years, at a greater rate for women than for men.8 Garet, Jing, and Kutner (1996) found that receipt of a GED was a strong predictor of years of vocational training acquired, especially for women.9 In addition, Kroll and Qi (1995) showed that GED recipients were three to four times as likely as those who failed the tests to enroll in either vocational schools or two-year or four-year colleges.

As most postsecondary institutions require a high school credential for admission, dropouts who want to attend postsecondary programs will find the GED program an efficient means of meeting this certification requirement. In addition, the GED fulfills ‘‘ability to benefit’’ requirements for access to federal financial aid. In comparison, the number and proportion of dropouts enrolled in degree-granting college programs is small. While some dropouts do participate in vocational-technical and other training programs, the rates of participation are very low.10

While postsecondary enrollment rates for GED recipients are much higher than the rates of other dropouts, completion rates tend to be far lower than for traditional high school graduates. GED holders, while completing vocational programs at about the same rate as traditional high school graduates, were only half as likely to complete associate’s degrees and much less likely to complete bachelor’s degrees. For example, Table 2 shows postsecondary persistence and degree attainment rates as of spring 1994 for GED recipients and regular high school graduates who enrolled in two-year and less than two-year institutions in 1989–1990. Dropout rates in these institutions tend to be high, especially among individuals seeking associate’s degrees. While only a third of community college enrollees whose stated degree objective was an associate’s degree earned a degree at that level or higher, GED holders were far less likely than regular diploma graduates to do so (13.8 and 32.9 percent, respectively). GED completers were, however, more likely than regular diploma graduates to earn vocational certificates (15.4 and 11.1 percent). Among those who had not completed a degree or certificate five years after their first enrollment (70.9 percent of GED recipients and 56.1 percent of regular graduates), GED recipients had been enrolled for fewer months, on average, than their regular diploma counterparts. Data from longitudinal studies support these findings (Cameron 1994; Cameron & Heckman 1993; Garet et al. 1996). While the GED provides access to postsecondary education, it is associated with a relatively low probability of completing a postsecondary degree. A human capital perspective would only assign value to the GED if it led to further education and training. While this is the objective of a large percentage of GED test takers, only a small proportion actually complete higher-level degrees and qualifications. While widely advertised access to postsecondary institutions11 and accompanying federal financial aid may motivate high school dropouts to take the GED test, low completion rates should raise concerns about the adequacy of their preparation for postsecondary studies.


Human capital theory assumes that employers can easily discover the skill level of a prospective or current employee and pay them a wage appropriate for the skills that they bring to the job. Interviews, references, and close monitoring during probationary periods are different ways in which employers attempt to assess the skill level of prospective employees. If this information is difficult or costly to obtain, however, educational qualifications can provide a signal for potential productivity to employers (Spence 1973).


For signaling to be an important component of the incentive system underlying GED attainment, recipients should have higher skills (e.g., literacy proficiency, assessed achievement) than other dropouts. From a signaling perspective, the higher skilled dropouts would earn the GED to signal their skills and improve their labor market opportunities. Employers would seek to employ and/or pay higher wages to GED graduates, as the higher skills signaled by the GED should translate into higher productivity. The government might support or fund GED programs, then, because the GED credential could improve information available about prospective workers to employers. As a signal, the GED would serve a social function by reducing the costs for employers or educational institutions of pinpointing the skill level of the dropout population. If the GED works as an effective economic signal, labor markets would function more efficiently with the program than without it.

From a skills certification perspective, the GED appears to meet the main criteria of an economic signal. GED recipients have, on average, higher basic literacy skills, as measured by the 1992 National Adult Literacy Survey (NALS), than high school dropouts and skills that are similar to those of high school graduates with no further education.12 Table 3 shows the mean NALS test scores of GED recipients and high school graduates, both without further education, and of dropouts. It also shows the scores of all GED recipients and all high school graduates, including those with further education and the scores of the adult population in general (Kirsch, Jungeblut, Jenkins, and Kolstad 1993). GED recipients without further education scored as well on the NALS as high school graduates without further education. Non-credentialed dropouts had much lower NALS scores than either GED completers or high school graduates with no additional education. The GED distinguishes its recipients from other dropouts in terms of literacy skills. Results were similar in a second study conducted jointly by the GED Testing Service and the Educational Testing Service, where a national sample of GED examinees was administered the NALS and results were compared with regular diploma holders in the NALS sample (Baldwin, Kirsch, Rock, and Yamamoto 1995).


Current and future GED recipients also scored higher than non-credentialed dropouts on the Armed Services Vocational Aptitude Battery (ASVAB), a test used by the military to screen applicants and to assign new recruits to occupational training.13 Four research studies—Cameron and Heckman (1993), Cameron (1994), Garet et al. (1996), and Maloney (1993)—have compared the ASVAB scores of GED recipients, high school graduates, and high school dropouts, using data from the National Longitudinal Survey of Youth (NLSY). Across these studies, high school graduates with no further education performed better on the Armed Forces Qualification Test (AFQT), a subset of the ASVAB, than did GED holders, who in turn had higher scores than did high school dropouts. The AFQT scores of GED recipients were closer to those of high school graduates than to those of dropouts.

Judging from performance on these two tests, it is evident that the GED process sorts out non–high school graduates whose cognitive skills exceed those of dropouts in general. The skills measured in the NALS and the ASVAB should, logically, be related to how productive an individual is (or could be) on the job. The dimensions of literacy measured in these studies were designed to encompass a broad range of literacy tasks associated with work, home, and community contexts.14 If we assume that literacy skill level is associated with productivity (or is at least a precondition), as much of the human capital literature would suppose, then employers should be interested in sorting out the more literate GED recipients from other dropouts. The GED should function as a signal for employers because GED recipients have higher literacy skills than non-credentialed dropouts.

Much of the empirical literature on the GED suggests, though, that the economic return to GED certification can be explained by differences in the number of years of secondary school completed and differences in cognitive ability. Across studies based on the NLSY by Cameron and Heckman (1993), Cameron (1994), Garet et al. (1996), Maloney (1993), and Cao, Stromsdorfer, and Weeks (1993) the introduction of cognitive ability (as measured by the ASVAB) as a control greatly reduces or eliminates any wage differences between GED completers and dropouts but has a smaller effect on differences between GEDs and high school graduates. Controlling for ability statistically removed the GED’s primary advantage over other dropouts—their greater cognitive skills. This result is an indication that the skills measured by the ASVAB were already being rewarded in the labor market—the additional certification of the GED did not help its recipients.

Studies by Murnane, Willett, and Boudett (1995)15 and Tyler, Murnane, and Willett (1997)16 show, however, that over time, the wages of GED graduates grew more rapidly than they would have had the individuals not earned GEDs. Both studies suggest that these earnings gains may be the result of additional education and training opportunities that GED recipients took advantage of, a human capital effect, rather than from employers rewarding above average skills signaled by the GED.

Certification effects were found, however, in several evaluations of antipoverty programs. In his evaluations of the basic skills programs, JOBSTART and New Chance, Bos (1995, 1996) found 8 to 10 percent increases in earnings after GED certification. Evidence from these studies suggests that the GED may help disadvantaged high school dropouts improve their economic position through basic or remedial education needed to pass the GED and through the GED to obtain further job-related training and associated credentials (evidence supporting a human capital function rather than a signaling function for the credential). Since these antipoverty programs are highly targeted with relatively intensive educational components, the results are not generalizable to the broader GED population.17

Although the GED distinguishes a group of dropouts with literacy skills similar to those of graduates, there do not appear to be immediate rewards for taking and passing the exam. Although employers claim to treat high school graduates and GED completers equally, the empirical literature raises questions about the equivalence of these credentials. If high school graduates and GED holders have similar skills, why don’t employers pay them equally?


While economic theories rely on the incentive structure derived from a free labor market to drive their assumptions and results, theories that are more sociological in nature look deeper into the power relationships between groups and the impact of institutions on the lives of individuals. Functionalist theories of social reproduction examine how schools prepare the young for the economic and social roles they will play in society. More institutional models look to the rules and norms defined by the larger institutional structure to motivate the actions of individuals, as well as the collective society. These perspectives have both been used in the sociological literature to discuss the function of educational qualifications. This section applies these theories to the complex relationship between employers and high school dropouts. As was done for the two economic theories examined in the last section, these sociological theories will be used to explain the incentives for dropouts, employers, and educational institutions to demand the GED. Empirical evidence that would be necessary for evaluating the explanatory power of each theory to the case of the GED is considered and the degree to which past research and empirical evidence support each theory is discussed.


Although increasing student achievement is the primary focus of current reform efforts in the U.S. educational system, socialization to societal norms has long been recognized as an important component of schooling. Functionalist theories of the economic purpose of education argue that schooling primarily serves to prepare students for later work roles by teaching attitudes and social behavior appropriate to the workplace, such as cooperation, conformity to authority, punctuality, gender-appropriate attitudes, neatness, task orientation, care of property, and allegiance to the team (Bossert 1979; Dreeben 1968; Jackson 1968, summarized in DeMarrais and LeCompte 1999). The role of schools in acculturating young people to workplace norms is also a strong tenet of conflict theory in sociology, although the allocation mechanism is seen as less meritocratic (Bernstein 1977; Bourdieu and Passerson 1977; Bowles and Gintis 1976; Collins 1971, 1979; Gintis 1971).18

The lack of a socialization component in the GED attainment process could explain the limited economic benefits of attaining this credential. Given that less than a quarter of GED test takers spend more than 100 hours preparing for the exam, it is unlikely that studying for the GED alone will have a major socializing effect. By design, the GED is meant to distinguish dropouts with higher-level cognitive skills, rather than internalize institutional or workplace norms. This distinction between the GED and the traditional high school diploma is important. The act of dropping out may, in and of itself, demonstrate that an individual has difficulty adapting to the norms expected of him or her in an institutional environment. Although taking and passing the GED exam may demonstrate skills and motivation, it may not be sufficient to demonstrate successful internalization of the types of behaviors employers expect of high school graduates. Although ACE and most states maintain that the GED is equivalent to a high school diploma, employers may value the socialization signal provided by educational qualifications more than the skills signal. Since the socialization component is largely absent from the GED attainment process (although some programs, such as JOBSTART, do have a considerable seat-time component), employers may be more likely to treat GED holders like dropouts than like high school graduates.

Some evidence suggests that dropping out is linked to a failure to internalize institutional norms. Several studies have shown that high school dropouts demonstrate more detachment from educational institutions than do non-dropouts. They are substantially more likely to be truant, absent, and late, and to have substantially greater disciplinary problems in school, including being placed on probation and being expelled (Ekstrom, Goertz, Pollack, and Rock 1986; Quay and Allen 1982; Rumberger 1995; Wehlage and Rutter 1986). Alpert and Dunham (1986) found that misbehavior in school was the most important predictor of whether or not academically marginal students would drop out.

Obtaining a GED may not sufficiently demonstrate to employers that these former dropouts have successfully internalized desired workplace norms. Attrition rates of GED graduates in the military lend some evidence to this theory. Military manpower studies have shown attrition rates (i.e., the failure to complete the first contracted tour of duty) of GED holders to be about double those of high school graduates and about the same as those of dropouts. For example, between 1977 and 1983, the 36-month attrition rates were 22 percent for high school graduates, 45 percent for GED holders, and 52 percent for dropouts. These studies also showed that of all the variables examined—age, race, Armed Forces Qualification Test (AFQT) score, sex, marital status, and others—completion of high school was the single best predictor of an enlistee’s completing the first-term of enlistment (Laurence 1993; Laurence, Ramsberger, and Arabian 1996).

These studies suggest that while earning a GED may signal that an individual is motivated and has the basic cognitive skills of a high school graduate, it may not signal that the individual has developed or internalized the skills needed to be successful in a highly structured environment such as the military. Variability in the attrition rates among enlistees with other types of high school completion credentials lends some support to this view. Laurence, Ramsberger, and Arabian (1996) examined the 24-month attrition rates of individuals who enlisted without high school diplomas. Enlistees, who persisted through two or more years of college, even though they had not earned a high school diploma, had the lowest attrition rate, 20.4 percent. High school graduates had the next lowest, 22.5 percent. In the midrange were holders of a variety of different certificates requiring some sustained effort or seat time to attain. At the low end of the range, GED recipients had a 40.9 percent attrition rate, and other dropouts had a rate of 42.9 percent. The types of skills and attitudes required to complete a regular high school diploma may be similar to the skills and attitudes necessary to succeed in the military. By earning a regular high school diploma an individual can demonstrate the ability to persevere in a formalized and structured environment—a characteristic likely to be desirable in both military and civilian organizations. Evidence from the military’s research and recruitment policies lends support to the notion that many employers could be using education credentials as an indicator of internalization of desired workplace norms and not as a signal of potential productivity. While this may help to explain why the GED is not functioning like a traditional educational credential, it does not explain why dropouts seek it, educational institutions accept it, and society strongly supports it.


Although the economic returns to the GED may be less than advertised, the widespread societal assumption that this credential is equivalent to a high school diploma may be a sufficient motivator for non-credentialed dropouts to seek to attain it. Advocates of an institutional perspective argue that schools play a critical role in defining the norms by which individuals judge themselves. Educational norms, among others, serve to legitimize life-course choices that individuals make, directly impacting perceptions of self (Meyer 1987). Perceptions of what individuals should achieve in their lives and by when are structured, to a large extent, by the formal credentialing rules of educational systems. Individuals graduating from high school know that they will carry with them through life the status ‘‘high school graduate’’ and all of its associated rights and qualities (Meyer 1977). High schools confer this social status by awarding diplomas. Since these institutions officially validate successful completion of a major life-course transition, they have a strong impact on their students’ identity and personality. To the extent that the GED shares the status of the traditional high school diploma, incentives for attaining it may be similar.

One implication of this institutional perspective is that status deprivation will be most serious among those having deviated most seriously from widely held societal norms. In American society, a high school diploma, and increasingly a college diploma, is associated with a minimum level of educational success. High school graduation is associated with the passage from youth to adulthood, from nonproductive child to productive adult (Meyer 1987). Dropping out of school, on the other hand, has over time become associated with deviance and delinquency (Dorn 1996). Since educational norms are strongly embedded in American society, they are tightly linked to the formation of individual’s self-concept. The dropout remains seriously disengaged from important life-course events and transitions. For example, the reward structure in the workplace often mirrors the reward structure in schools—implying that those for whom success at school was limited may be less acquainted with, or accepting of, the non-formal rewards in the workplace (e.g., praise from superiors, feeling part of a group). Meyer (1987) argues that reduced self-concept of this educationally marginalized or off-track group is not just a psychological reaction but one that is highly legitimated by society. Our current societal values legitimate the reduced self-concept of the dropout, providing a strong incentive for dropouts to become graduates. From an institutional perspective, a dropout would have a strong incentive to earn a GED, over and above any economic rewards that might be linked to its completion. The GED provides a widely accepted means to improve social status and reintegrate into larger society. According to institutional theory, the GED would also be expected to have a transforming effect, as the individual assumes a legitimized social status position. Upon earning the credential, GED completers would be expected to start conforming to norms expected of a high school graduate, a role that increasingly translates into the expectation of college attendance.

If the GED is functioning as a fully institutionalized educational qualification, we should expect to see some convergence in the behaviors of high school diploma and GED graduates. GED graduates should begin to look more like regular high school graduates, or we should at least see them trying to do so—less likely to commit crimes, live on welfare, have illegitimate children, and so on. While there is some evidence that this may be the case, the type of empirical data to fully test this institutional hypothesis is limited.19 Anecdotal accounts from test administrators and adult educators do, however, contain many references to the enhanced self-esteem of GED recipients, and surveys typically report that GED graduates feel better about themselves earning their credential. For example, Mally and Charuhas (1977) found that 88 percent of the GED recipients they surveyed in Illinois said they felt better about themselves as a result of passing the tests. Only 1 percent said they did not, while 11 percent did not answer the question. Similarly, Darkenwald and Valentine (1985) reported that 94 percent of the respondents to a follow-up survey in New Jersey said that feeling better about themselves was one benefit of the tests. In a survey of GED graduates conducted by the Iowa Department of Education (1992), 77 percent said that passing the GED increased their self-esteem very much, and an additional 18 percent said it increased their self-esteem to some extent. In her survey of GED recipients in Maryland, Reed (1985) found that 73 percent of respondents reported increased self-confidence in their abilities, and 93 percent felt that the program had given them a second chance. Almost 90 percent said that their families were pleased, 50 percent felt that their lives had gained more direction, and 43 percent said that they had assumed more responsibility as a result of passing the tests. While empirical evidence of the transforming effect of the GED is limited, GED recipients appear among some of the strongest advocates for the program.

The ‘‘institutionalized self ’’ perspective advocated by Meyer (1987) and described previously provides a possible explanation for why dropouts would be interested in earning a GED despite limited economic returns. In fact, many GED test takers report that they are taking the exam for reasons that are not directly related to their jobs. According to the GED Testing Service, over one-fourth of currently employed GED candidates report that the most important reason for taking the test is to ‘‘feel better about themselves’’ (23 percent) or to ‘‘become better educated’’ (4 percent) (Baldwin 1991). Another one-third of GED candidates report taking the test as a way to reintegrate themselves into the education system by gaining admission to college (22 percent) trade school (9 percent) or a job-training program (2 percent). Only about one-third report taking the test primarily for job-related reasons. As noted earlier, a large proportion of GED completers actually go on to higher education, even though high numbers fail to earn higher-level qualifications. Even with reduced chances of success, GED graduates often attempt to climb the next rung in the education ladder, a role typically expected of high school graduates.

Earning a high school equivalency diploma by passing the GED test is by far the easiest way for dropouts to become a high school graduate. The test can be completed in a one-day session, and the financial cost of taking the GED test is minimal compared to the opportunity costs of returning to high school either full- or part-time. In 2000, Arkansas, Maine, New York, and Puerto Rico gave the test free of charge, while testing fees in other states ranged from $7.50 to approximately $80.00 (GEDTS 2001). Applicants who fail the GED test are allowed to retake it until they pass, although some states do require a waiting period and attendance at a preparation program before retesting. The GED clearly functions as a low-cost mechanism for awarding high school equivalency credentials.

By renewing the social status of dropouts, the GED provides an opening back into mainstream society. The GED, as a terminal degree, may have little short-run economic value, but it can provide a bridge for dropouts to reconnect to both the education system and their high school graduate peers. For example, there is some evidence that earning a GED in prison slightly reduces the likelihood of recidivism. The recidivism rate of a sample of offenders in New York State who had earned a GED while incarcerated was lower than the rate for those offenders who did not earn a GED (34 and 39 percent, respectively; State of New York Department of Correctional Services 1989). Also, earning a GED while on the job may demonstrate to an employer that an individual is serious about his or her future, leading the employer to provide or pay for supplementary training for the employee. There is some evidence to support this assertion: GED graduates receive more of all types of training (employer-based, vocational education, and college education) than any other high school dropouts (Murnane, Willet, and Boudett 1997). Finally, there is some evidence that GED attainment is associated with higher voting rates among men (Reder 1994). One might argue though, that these findings are influenced by selectivity effects (i.e., if more motivated individuals get GEDs, then the positive outcomes are likely to be related to the motivation and not the credential). An institutionalist might respond that the process of returning to earn a high school equivalency diploma creates the motivation, and that this has a positive spillover into other aspects of an individual’s life. Although there is currently no empirical evidence that would allow us to test whether or not motivation is an exogenous or endogenous variable in the GED attainment process, the desire to align with a norm structure that equates minimum success with the attainment of a high school degree may help to explain the popularity of the GED among dropouts.20

An institutional model would not necessarily associate skill or productivity improvements with GED attainment. If skills or worker norms are lacking, employers may accept GED graduates only if they are required by state regulation. State agencies are one set of employers that are currently encouraged to regard GED completers as equivalent to traditional graduates in hiring. For example, the civil service rules in many states dictate the equivalence of the GED to the diploma in meeting minimum requirements for job applicants. Firms whose economic success is more highly dependent on the conformity of its workforce may prefer traditional high school graduates. Educational institutions may accept the GED as an entry requirement even if these students are unlikely to succeed, as the legitimacy attached to the qualification helps educational institutions expand their applicant base. So why do governmental authorities, at the local, state, and federal level, invest so much in the GED program?


The GED provides the state with an inexpensive and highly legitimized means of reducing dropout rates without interfering with the administration and management of local schooling. Institutional theory suggests that instructional activities and programs are rarely supported and rewarded directly in response to the quality of their educational outputs; rather, they receive legitimacy and material resources by conforming to widely shared cultural beliefs (Meyer 1977). Meyer (1987) points out that one dimension in which the modern nation-state is evaluated is the extent to which it provides equality of educational opportunity to all of its members. Educational institutions tend to portray both themselves and society as meritocratic and as inexorably moving toward greater social and economic justice. In this way, they foster the social belief that the major institutions of our society are equally responsive to all regardless of race, class, or sex. One way in which the educational system can maintain the image of a system that provides high school–level education to nearly all is by providing a second chance at a high school diploma to those who have dropped out. The GED is a highly legitimized means of doing so. One of the defining characteristics of an institution is that the ‘‘rules and myths surrounding it are taken for granted as legitimate, apart from evaluations of their impact on work outcomes’’ (Meyer and Rowan 1991, 44). The inclusion of the GED in the accounting framework for National Education Goal 2 is an example of this ‘‘taken for grantedness’’ and arguably nearly ensured that there would be at least one goal that the United States might come close to meeting by the year 2000.

Although some researchers and journalist have publicly criticized the GED for its weak economic returns, (Chapman 1994; Greene 2002), few states have reviewed the standards for the GED credential and even fewer have criticized them (Quinn 1997a). Simply counting GED graduates as ‘‘successful completions’’ allows states to lower their system-wide dropout rates (Marriott 1993). Thus, states can meet their stated education goals and maintain their legitimacy in providing equal educational opportunity, without intervening at the school district level or extensively funding adult education or night school courses.21 In fact, several qualitative researchers have found GED programs the destination of choice for large urban schools to remove disruptive students from the premises without increasing reported dropout rates (Fine 1991; Riehl 1999). Given that 63 percent of U.S. GED candidates in 2000 had completed no more than the tenth grade (and 33 percent had completed no more than the ninth grade), the GED is certainly a low-cost alternative to returning dropouts to either a regular or adult high school to earn a diploma (GEDTS 2001).

Reification of the GED by the Federal Government and Educational Institutions

The federal government has helped to further maintain the legitimacy of the GED by using it as a screening tool for eligibility for federal financial aid (Boesel et al., 1998). Pell Grants and Supplementary Educational Opportunity Grants require recipients to be students at approved postsecondary education or training institutions and to demonstrate both a need for financial aid and an ability to benefit from it, which is most easily accomplished by having a high school diploma or a GED. In addition, financial aid legislation requires that institutions that accept students without a high school diploma or GED credential to make a GED-preparatory program available to such students (U.S. Department of Education 1995).

Educational institutions also act to support the legitimacy of the GED. Surveys of postsecondary institutions indicate that most claim to accept the GED as equivalent to a high school diploma for admission purposes, although these institutions may require additional evidence of ability to perform in college (Spille memorandum 1982, reported in Quinn 1997a; Hexter and Anderson 1986).22 In this respect, admission requirements for GEDs are similar to those for high school graduates, who often have to provide evidence, beyond a diploma, of their ability to perform well at the postsecondary level. ACE’s Commission on Educational Credit and Credentials recommends that if a college or university has additional requirements beyond a high school diploma, they should apply to GED recipients as well as to high school graduates (Boesel et al., 1998). As a result, the GED is treated in the same way as a high school diploma for entry into most four-year colleges and universities, as a necessary, although not sufficient, requirement. Among two-year institutions, the GED typically fulfills any requirement of a high school diploma that an institution might have.

As the federal government is now tying the financial aid eligibility of educational institutions to their students’ loan default rates, it will be important to monitor whether or not institutions adjust their admissions requirements related to the GED. One study (Dynarski 1994) found that 44 percent of GED recipients defaulted on Guaranteed Student Loans, as compared to 14 percent of high school graduates and 56 percent of dropouts. Loan default rates and postsecondary persistence rates are examples of the type of technical inspection and evaluation procedures that institutionalists argue that highly institutionalized organizations seek to marginalize as evaluation criteria (Meyer and Rowan 1991). To the extent that high default rates among GED recipients put educational institutions at risk of losing their financial aid eligibility, these institutions may reconsider the equivalence of the GED to the high school diploma in the admissions process.

The GED As a Legitimizing Tool for Peripheral Education Programs

The GED also serves an important legitimizing function for less strongly institutionalized programs, including those providing basic education, skill improvement, and antipoverty support. Many basic education and training programs, to demonstrate that they are effective, need a visible outcome for participants. A majority of all adult secondary education students spend much of their time preparing for the GED tests. Different levels of government actively support these linkages. The Adult Education Act of 1966 expanded the federal funding for Adult Basic Education (ABE) to include secondary education. ABE programs embraced the GED because the participant’s desire to attain a high school credential served as a powerful motivational tool (Quinn 1997a). Between 1970 and 1978, about 900,000 adults had achieved a ‘‘high school education or its equivalent’’ under the Adult Basic Education Act (U.S. Congress House Committee on Education and Labor, 1978, cited in Quinn 1997a).

The GED was also used by Job Corps, which found that even youth testing below the 5.5 grade level minimum on the Stanford Achievement Test could successfully pass the GED after their 200 hour preparatory course (Levitan and Johnston 1975, cited in Quinn 1997a). More recently, the federal Even Start program provided for the implementation of several hundred projects that delivered family literacy services to more than 20,000 families at a federal cost of about $2,500 per family per year—almost all (93 percent) of the projects reported that they provided services to prepare adults to attain a GED certificate (U.S. Department of Education 1994a). In 1992, the federal Adult Education for the Homeless (AEH) program served 50,000 clients, providing adult education services to help homeless adults increase their employability, earn a GED or some other type of adult diploma, or reach personal or economic objectives (U.S. Department of Education 1994b). The Temporary Assistance for Needy Families (TANF) policy, an antipoverty program, even requires women and teenage mothers to earn a high school diploma or pass the GED test in exchange for temporary benefits (Georges 1998). As a highly institutionalized credential, the GED functions as a highly legitimized outcome for programs targeted at some of the most marginalized groups in society: unemployed dropouts, welfare moms, and prison inmates. GED completion rates become what Meyer and Rowan (1991) refer to as the ‘‘rationalized ritual of inspection and evaluation’’ for these basic education and antipoverty programs, rather than the actual economic and educational outcomes of graduates.

An institutionalist perspective helps explain why the GED receives wide societal support even though the microlevel benefits of earning this credential appear to be limited. The GED helps multiple components of the educational system meet dropout reduction goals, without major funding for adult high schools or the kinds of systemic changes that might be needed to keep more young kids in school. When serious questions about the college success rates of GED graduates have been raised, as was the case in Wisconsin in the 1980s (Quinn 1997b), the response was to raise the cut score needed to pass the test rather than to completely rethink the logic behind awarding a high school equivalence based on a test of basic skills alone. The GED Testing Service uses testimonials from both famous (Bill Cosby, Wendy’s founder the late Dave Thomas, Delaware’s Lieutenant Governor Ruth Ann Minner, actor Christian Slater, and U.S. Senator Ben Nighthorse Campbell) and unknown GED graduates to reify the myth of the degree’s equivalence to the regular diploma. Social and economic pressures drive the education system to increase high school completion rates and college entry rates. The GED serves as a highly legitimized means of doing so.






Taken as a whole, the economic and sociological theories reviewed previously can help us explain the central GED paradox—strong demand for the credential, despite meager economic and educational returns. Table 4 summarizes how each of these theories can be used to describe the factors underlying demand for the qualification, from the perspective of the individual, employers and educational institutions, and the state. Economic theory would suggest that demand for the credential should be linked to either the learning opportunity associated with it (human capital theory) or the certification of skills that it should embody (signaling theory). From a human capital perspective, dropouts would have an incentive to earn a GED if it provided an opportunity for them to enhance their skills, either through the process of preparing for the examination or through the educational and training opportunities that attaining the credential opens. Employers would be expected to reward skill increases with higher earnings and the broader society would facilitate GED acquisition because an increase in the aggregate level of skill in the population should lead to increases in productivity. The evidence reviewed here leads us to question skill improvement as a dominant outcome of current GED attainment. Less than a quarter of GED seekers spend more than 100 hours in preparation for the test and the median amount of time spent in study is far less. While positive economic returns to intensive basic skill acquisition in programs such as JOBSTART indicate that there may be economic benefits to completing a GED program, the participant numbers are too small to explain the widespread demand for the qualification. If the GED were to open the door to human capital accumulation through further education and training, then the strong demand for the qualification might be warranted. Significant increases in human capital are likely to be the exception rather than the rule, however, as few GED graduates go on to earn postsecondary qualifications, even though most make an attempt at some postsecondary education. The human capital perspective helps us to understand why the GED is not functioning in the same way as credentials more strongly linked to skill acquisition, although it provides little insight into why demand for the credential remains so strong. If GED preparation were more tightly coupled with substantial basic skill development, as was the case in JOBSTART, as well as further development of the kinds of study skills needed to succeed in a postsecondary program, the human capital value of the GED could be increased. These types of changes would be more costly than developing, offering, and grading a test, however.

Economic signaling theory suggests that any qualification that is easier for more productive people to earn than for less productive people to earn should be rewarded in the labor market. The GED seems to be an ideal candidate for this perspective, as the literacy skills of GED graduates appear to be closer to regular diploma graduates than to dropouts. There is little evidence, however, that the GED is functioning as a means for dropouts with higher skills to signal this information to employers. Although GED attainment is associated with higher cognitive skills, data on the earnings of recipients suggest that this information is either already available to employers or not their primary interest when hiring. While human capital theory suggests that the minimal economic returns to the GED, which economists have documented, can be explained by the minimal educational investment needed to earn the credential, this perspective doesn’t explain the strong individual and institutional demand for this second chance program. Furthermore, economic signaling theory predicts an economic advantage to GED holders, because of their above average skills, that economist have failed to find. Sociological theory was then applied to address this conundrum.

As the GED gained legitimacy as the equivalent to a high school diploma, based on its success at reintegrating veterans into the higher education system after the end of the Second World War, it began to displace the regular high school diploma among young people at the margin. The popular notion that dropout rates have declined over the past thirty years is a testament to the equivalency of the two credentials being taken for granted. An institutionalist perspective helps explain why the GED receives wide societal support even though the micro level benefits of earning this credential appear to be limited. Counting GED graduates as successful completions allows the educational system a shield against critics claiming widespread school failure. States can meet their stated education goals, and maintain their legitimacy in providing equal educational opportunity, without intervening at the school district level or extensively funding adult education or night school courses. At a time when increasing graduation standards is a priority in many states, it is notable that there is very little discussion of standards relating to the GED.

Sociological theory is also useful for explaining why there might be strong demand for the GED among dropouts, even though demand for GED holders among employers appears to be weak. For employers, the GED may be an inadequate signal of successful internalization of institutional norms. Although GED recipients have higher-level skills than other dropouts, employers may value more highly punctuality, respect for authority, the ability to meet deadlines, and conformity to organizational norms—skills and values that the high school diploma is more likely to certify than is a GED. In order for the GED to function as an effective economic signal, it might be necessary for GED recipients to demonstrate that they have successfully internalized these kinds of institutional norms. This might be through the completion of a formal education program (i.e., seat time) or by demonstrating through employer recommendations or a stable job history that they can succeed in a work environment.

While the socialization-to-work model points to the failure of the GED to function like other educational qualifications, the broader status reproduction framework supports a clear societal function for GED production. Although the individual may not benefit much economically from GED attainment, the awarding of high school equivalencies to dropouts helps the educational system maintain the illusion of equality of educational opportunity, a core legitimating value in modern society, by reducing dropout rates. As high-stakes testing gains popularity in many states, schools and districts should closely monitor, and be held accountable by states for, the number of students pushed into GED programs. Dropout and GED transition rates of minority and low-income students should receive particular scrutiny.

Institutional theory was then examined to understand why dropouts would be interested in earning a GED despite meager economic returns and the low probability of success in higher education. The heavily institutionalized norms that closely associate success in life with success in school were offered as a possible explanation of widespread demand for a GED among dropouts. Dropouts seek GEDs to improve their social status and reintegrate themselves into the larger society. While an institutional argument does not imply that there is no economic gain from credential attainment, it does not require one. This perspective would also predict that the GED should have a transforming effect on its recipients—as the dropouts assume highly legitimized roles—including continuation into some form of postsecondary education. Educational institutions can do more to make this transition effective. Bridging programs that help GED recipients learn the types of study skills that will allow them to succeed in higher education have shown some success. For example, Kingsborough Community College in Brooklyn, New York, developed an integrated science program, the GED Support Seminar, to prevent dropout behavior among freshmen GED holders. The program adopted a multidisciplinary approach for support activities such as a study of popular issues, stress, ESP, and scientific thinking. The program successfully helped students who were potential dropouts continue in their education (Biermann and Platt 1992).

The GED program is a low-cost way to integrate hundreds of thousands of off-track individuals back into the mainstream, while at the same time providing an efficient means for the educational system to meet dropout reduction goals. If high-stakes testing takes hold as a means of certifying the curriculum-based knowledge of graduating seniors, the GED may continue to function as safety valve against widespread postsecondary failure. Haney (2001) suggests that this may be happening in Texas, as the introduction of high-stakes testing was matched by an increase in the number of students taking GED tests in the mid-1990s. In the Texas case just attending a GED program removes a dropout from the dropout roles, making the link between high-stakes testing and dropping out difficult to monitor. Truth in advertising warrants that Americans be made aware that nearly a quarter of young people do not graduate from high school and that although the GED offers a second chance to complete high school, it is clearly a second best alternative. Educational institutions should work harder to bridge the gap, either by trying to keep at-risk students in school or by designing reentry programs that will ease dropouts’ transition to postsecondary education. Although the GED Testing Service released a new version of the GED test in 2002, aligned more closely with national and state-level standards (GEDTS 1999), it remains a test-based credential. As an educational credential, the GED will remain unique—divorced from the socialization experience that was the basis of the expansion of American schooling.


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THOMAS M. SMITH is assistant professor of public policy and education in the Department of Leadership, Policy and Organizations, Peabody College, Vanderbilt University. His current research focuses on cross-school variability in the incentives for teachers to participate in mentorship and professional development activities; the efficacy of grades for predicting earnings growth for non-college-bound youth; the economic and social consequences of GED attainment; and organizational predictors of cross-national variability in teachers’ instructional practice.

Cite This Article as: Teachers College Record Volume 105 Number 3, 2003, p. 375-415
https://www.tcrecord.org ID Number: 11110, Date Accessed: 10/26/2021 1:07:04 AM

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