Association for Public Policy Analysis & Management

The observed differences in earnings between more and less educated workers has led to competing theories of human capital and contract signaling. We make use of publicly available Census Current Population Survey (CPS) data running from 2010 to 2018 to investigate the wage differentials of high school dropouts who have earned a General Equivalency Test (GED) credential. This sample is comprised of individuals who left high school at differing times, later earned a GED, and did not go on to acquire post-secondary education. Controlling for demographic and job-related characteristics, we find that individuals who completed more years of high school receive a higher weekly wage. This relationship is significant for individuals who completed 11^th or 12^th grade and these findings are robust across multiple regression specifications. These findings offer support to the human capital theory and contribute to the policy discussion surrounding the use and worth of GED certificates in the United States.