Tassels on the cheap: treating the GED as a high-school diploma masks a declining graduation rate

Education Next, Fall, 2002 by Duncan Chaplin

For more than a century the department of education has collected data on the number of high-school diplomas awarded each year. A statistic called the" degree ratio" can readily be calculated by combining these data with population figures from the U.S. Census. The degree ratio is the number of high school diplomas awarded in a given year divided by the number of individuals aged 17. This gives us an estimate of the annual graduation rate--the percentage of each class of schoolchildren that goes on to graduate from high school.

By this measure, high-school graduation rates have soared dramatically since the late 1800s. Between 1870 and 1970, the degree ratio rose from just 0,02, meaning that 2 out of every 100 schoolchildren graduated from high school, to no less than 0.77 (see Figure 1), Indeed, a knowledgeable observer in 1960 might have predicted that the nation would have approached universal high-school graduation by the turn of the century. But 1969 would prove to be the zenith of mortar boards and graduation gowns. After that, the degree ratio began slipping, to 0.74 by 1990, and continuing through the '90s, dropping to 0.70 in 2000. This was in spite of the National Education Goals Panel's setting a much-heralded goal of a 90 percent graduation rate for that year.

The evidence of a falling graduation rate since 1969 would have become a national scandal by now had it not been disguised by the fact that the degree ratio is not the yardstick of choice. Instead, the National Education Goals Panel chose an alternative measure that confuses more than it clarifies, The alternative way of estimating high-school graduation rates uses the Current Population Survey of some 50,000 households. The head of each of these households is asked whether anyone aged 18 to 24 in the household is a high-school graduate or has received an equivalent degree (the most common equivalent being the General Educational Development, or GED, certificate). By this yardstick, the decline in graduation rates during the 1990s is not so apparent. Numbers from the Current Population Survey indicate that the graduation rate remained essentially constant at 86 percent over the decade (see Figure2 ).

The difference lies mainly in the increasing share of students deemed high-school graduates by the Current Population Survey who are in fact taking the GED instead of finishing high school with a regular degree. To earn a GED, students who wish to leave high school early need only pass a test demonstrating that they have attained skills supposedly equivalent to those of a high-school graduate. Remove those students from the ranks of graduates, and the rate from the Current Population Survey falls to 81 percent in 1990. Moreover, as a result of a near doubling in the share of students receiving GEDs, the rate fell even further, to 77 percent, by 1999, Not only has the nation failed to achieve its goal of 90 percent; it appears to be falling further behind.

The GED Illusion

So why nor equate receiving a GED with being a high-school graduate? After all, most states consider earning a GED the same as earning a high-school diploma; they often even name the GED credential a "High School Diploma" or "High School Equivalency Certificate' Of course, the makers of the GED promote this notion, As of August 2001, visitors to the GED website could read: "More than 95 percent of employers in the U.S. consider GED graduates the same as traditional high-school graduates in regard to hiring, salary, and opportunity for advancement,"

However, what employers say and what they do can be two very different things. In a 1993 study aptly tided" The Nonequivalence of High School Equivalents;' Stephen Cameron and James Heckman found that recipients of a regular high-school degree earn approximately 11 percent more than youths with a GED certificate. Likewise, a 1996 study by Richard Murnane, John Willett, and John Tyler found an 18 percent premium accruing to regular high-school graduates vis-a-vis similar students who dropped out in the 11th grade but earned a GED. In short, a load of solid evidence suggests that employers value a high-school diploma that was earned the hard way over a GED. Perhaps they see it as an indication of diligence and determination, attributes that are highly valued in the workplace. As a consequence, the apparent flow from regular degrees to GEDs should be cause for concern.

Of course, GED recipients include many older youth and adults who are unlikely to return to high school, even without the GED program. Nevertheless, GED recipients compose a large and growing fraction of all teenagers with high-school credentials. Since 1978 the size of this group has more than doubled, reaching almost 7 percent in 1997. Even 16-year-olds take the GED with increasing frequency. In 1997 there were 10,000 new 16-year-old GED recipients. Meanwhile, the number of states allowing 16-year-olds to rake the GED increased from 25 in 1989 to 35 in 1997. Recent evidence suggests that when the rules allowing teenagers to get a GED are relaxed, more teenagers get GEDs and dropout rates increase, though the effects can be mitigated if teenagers are allowed to get a GED only with a parent's permission. The upshot is that a disturbingly high and growing number of teenagers appear to be substituting the GED for the time and toil required to earn a regular high-school diploma (see Figure 3).