Heckman talk (mp3) at Yale Law School (also available on iTunes). For related results on personality and earnings for cognitively gifted individuals, see Earnings effects of personality, education and IQ for the gifted.
James J. Heckman, John Eric Humphries, Nicholas S. Mader
NBER Working Paper No. 16064
The General Educational Development (GED) credential is issued on the basis of an eight hour subject-based test. The test claims to establish equivalence between dropouts and traditional high school graduates, opening the door to college and positions in the labor market. In 2008 alone, almost 500,000 dropouts passed the test, amounting to 12% of all high school credentials issued in that year. This chapter reviews the academic literature on the GED, which finds minimal value of the certificate in terms of labor market outcomes and that only a few individuals successfully use it as a path to obtain post-secondary credentials. Although the GED establishes cognitive equivalence on one measure of scholastic aptitude, recipients still face limited opportunity due to deficits in noncognitive skills such as persistence, motivation and reliability. The literature finds that the GED testing program distorts social statistics on high school completion rates, minority graduation gaps, and sources of wage growth. Recent work demonstrates that, through its availability and low cost, the GED also induces some students to drop out of school. The GED program is unique to the United States and Canada, but provides policy insight relevant to any nation's educational context.
This figure shows that high school completion probability varies mainly according to cognitive ability, whereas GED completion is positively correlated with low non-cognitive ability (i.e., low conscientiousness). (Numerical score 1 = low, 10 = high; click for larger version.)
The related question we will be facing in the near future: what are relative job success probabilities for students with degrees from a traditional college versus those with credentials obtained via online education? For example, consider a smart kid who obtains high grades in linear algebra and C++ from MIT/Harvard/Berkeley edX, but chooses not to attend university, versus a graduate from a traditional engineering program. Exactly what is being signaled or predicted by these two life paths? Who would you hire?