State High School Exit Examinations and Post-Secondary Labor Market Outcomes

Since the early 1980s an increasing number of states have required students to pass statewide high school exit examinations (HSEEs) in order to graduate. States have usually adopted HSEEs in response to the perception that substantial numbers of graduates lack skills required for success in the modern economy. What do these education reforms mean for students postsecondary economic and labor market prospects? The central hypothesis of our research is that state HSEE policies have the effect of widening gaps in labor force status and earnings between young people who have high school diplomas and those without them. To test this hypothesis we model the association between state HSEE policies and these labor market outcomes using data from the 1980 through 2000 U.S. Censuses. We find no evidence that state HSEEs affect labor force status or earnings, or that the connections between state HSEE policies and these labor market outcomes vary by students race/ethnicity or the level of difficulty of state HSEEs.