Collaborative Research: High School Exit Examinations and Labor Market Outcomes Among Young Adults

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Since the early 1980s, an increasing number of states have required students to pass statewide high school exit examinations (HSEEs) in order to graduate. States have generally adopted HSEEs in response to the perception that high school graduates lack the skills required for success in the 'new economy' and that requiring students to pass a high-stakes test will make the high school diploma meaningful to employers. Members of the class of 2003 faced HSEE requirements in 20 states. What do these education reforms mean for students' post-high school employment and economic prospects? If HSEEs really do certify that students possess basic skills necessary for success in the modern labor market, it follows that HSEE policies should exacerbate labor market differences between high school graduates and those who fail to complete high school. The central hypotheses of the investigators' research is that state HSEE policies have the effect of widening gaps in employment rates, earnings, poverty rates, and public assistance use between students who have high school diplomas and those who do not. To evaluate these hypotheses, the authors estimate state fixed effects models for each outcome based on the 1984 to 2003 Current Population Survey (CPS) and the 1980, 1990 and 2000 decennial census data. Each outcome is assumed to follow potentially different state-specific growth trajectories for those who do and do not complete high school, and to be affected by characteristics of both individuals and states. The effect of state HSEE requirements is identified as a deviation from the state-specific trajectory of the outcome for high school completers relative to the outcome for those who do not complete high school.This project will make both fundamental and applied contributions to sociology. In terms of fundamental research, sociologists and labor economists have offered competing explanations for the earnings advantage associated with higher levels of educational attainment. Proponents of human capital and signaling theory argue that the productive capacities of workers are either enhanced or signified by a high school diploma, while credentialists maintain that high school diplomas serve only to mark membership in a certain status culture. If human capital and signaling theorists are correct, we would expect to see an increase in the earnings difference between graduates and noncompleters following the implementation of an HSEE. Credential theorists would expect no change in the high school graduate advantage, however, as the HSEE would be unlikely to alter the distribution of status culture across those who do and do not complete high school.In a more applied sense, policy makers at both the state and federal levels have embraced high school exit exams as an important component of school accountability reforms. The HSEE, they argue, will help make the high school diploma meaningful, resulting in greater labor market success for those who complete high school. Despite the rhetorical appeal of these claims, however, there has been little empirical work to substantiate them. This study will fill a hole in the literature by offering a comprehensive national evaluation of the benefits of HSEE policies.