By David Phillips, Associate Research Professor of Economics
LEO announces a new working paper: The Labor Market Return to Reversing High School Dropout.
Adults who dropped out of high school enroll at The Goodwill Excel Center. Graduates get the same high school diploma I have. Five years later, their earnings have increased by 39%.
![Excel Center Grads Quarterly Earnings](/assets/429717/excel_center_grads_quarterly_earnings.png)
Most people who drop out of high school do not get a full high school diploma, or even a chance at one. In many states, adults cannot legally get a high school diploma. Test-based credentials like the GED take their place. But often those alternatives have low returns.
The Excel Center addresses a number of barriers to graduation: matching coursework to the student, shorter terms and alternate class schedules, free on-site childcare, transportation assistance, and life coaches. This gets students who dropped out before a second chance at a diploma.
In LEO's study, we compare changes in earnings of graduates to both students who enrolled in The Excel Center but exited before graduating and applicants who applied but did not enroll. Earnings are 39% higher for graduates, nearly all from graduating vs. enrolling.
![Earnings 1](/assets/430238/earnings_1.jpg)
Selection on post-enrollment shocks is unlikely to drive observed differences in earnings. Similar results if we compare to positively selected groups: students who exit to get a job, students who persist for many terms. Similar results on assignment to remediation IV.
![Remediation 1](/assets/430243/remediation_1.jpg)
What we're finding differs starkly from the evidence on the GED. Returns to the GED are typically found to be low to zero. The Excel Center gets a different result by aiming for a full diploma and providing intensive supports.
New skills seem to be a big part of why a diploma is better. The Excel Center grads get more certifications and community college credits, particularly in healthcare. Their employment shifts from restaurants, hotels, and temp agencies to healthcare jobs.
![Jobs](/assets/430246/jobs.jpg)
We're an optimistic counterpoint to the view that educational programs only matter in early childhood. With supports to address costs/complexity of returning to high school, adults who previously dropped out can complete a diploma and reap its large labor market returns.
We are thankful to our partners at Goodwill of Central & Southern Indiana. This project also benefits from the great administrative data available from the Indiana Management Performance Hub.