Reprinted from the July 2001 issue of the NAWDP Advantage

In an economy that increasingly values skills, can a young woman without a high school diploma get a second chance? Kathryn Parker Boudett, Richard J. Murnane and John B. Willett investigate the success of four different educational strategies for female dropouts in an article in the December 2000 issue of Monthly Labor Review.

The four kinds of educational investments the authors studied were: the GED, on-the-job training, completing a year or more of college, and "off-the-job" training obtained through a government program or proprietary training institution. The data came from a national survey of 12,686 young men and women begun in 1979. The typical woman in the sample dropped out of school after having completed ninth grade. Approximately 75% were married at some point during the survey and 90% had at least one child. Average annual earnings in 1990 dollars was $4,725 and the probability of a woman reporting earnings in any particular year was 65%. The women in the sample scored 19.54 on the Armed Forces Qualifications Test - about half of the mean AFQT score of women with traditional high school diplomas.

An analysis of the sample showed that during the period the sample was studied 36% of women in the sample chose not to pursue any sort of further education, 41% obtained a GED, 39% obtained off-the-job training, 16% obtained on-the-job training and 9% completed a year or more of college. Obviously, there is a good deal of overlap in these numbers - some women may have pursued all four.

The authors report two key findings. First, investing in education can pay off. For example, ten years after dropping out of school, obtaining a GED in the 3rd year after dropping out is associated with an earnings gain of about 25%. A GED and a year of off-the-job training or college can boost income by 50%. Over her lifetime, additional training is almost always a good investment for the individual, although the benefit to society as a whole may or may not be positive, depending on the total social cost of providing the training.

The more sobering finding, however, is that the absolute size of earnings gains is still relatively small, since these women are starting from such a low baseline. A woman who obtains a GED and completes a year of training is still predicted to earn less than $8,000 in the 10th year after dropping out of school. Although this is a big increase compared to those who do not pursue further education, it is only 87% of the poverty line for a family of two in 1994. For the average woman, then, obtaining a GED, with or without further education, does not bring economic independence.

The authors caution that the impact of additional training is initially modest, and only grows over time. As currently written, WIA guidelines for assessing the impact of adult education programs suggest measuring employment outcomes within one year of completion of the program. The authors of this study suggest that a longer time horizon may be needed to capture meaningful impacts. Nevertheless, the message is that women who drop out can get a second chance at economic opportunity through obtaining a GED and using that credential as a stepping-stone to training or college.

© 2001 National Association of Workforce Development Professionals

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