Taking the Easy Way Out: How the GED Testing Program Induces Students to Drop Out

We exploit an exogenous increase in General Educational Development (GED) testing requirements to determine whether raising the difficulty of the test causes students to finish high school rather than drop out and GED certify. We find that a six point decrease in GED pass rates induces a 1.3 point decline in overall dropout rates. The effect size is also much larger for older students and minorities. Finally, a natural experiment based on the late introduction of the GED in California reveals, that adopting the program increased the dropout rate by 3 points more relative to other states during the mid-1970s.