DO HIGH-SCHOOL DROPOUTS BENEFIT FROM OBTAINING A GED

This article uses longitudinal data from the National Longitudinal Sur vey of Youth for the years 1979-1991 to study whether male high school dropouts' trajectories of wages, annual number of hours worked, and a nnual earnings are affected by acquisition of the General Educational Development (GED) credential. Our analysis takes into account potentia l heteroscedasticity and possible autocorrelation among the error term s pertaining to different years of longitudinal data on the same indiv idual. We find that acquisition of the GED is associated with an incre ase in the rate of wage growth. Our findings are consistent with the h ypothesis that some dropouts, after obtaining a GED, search for a bett er paying job or enter a training program.