If just one person reads this and changes his mind about dropping out of high school, it was worth my effort to write this article.
The Worth of a GED depends on your long term goal.
That’s the real money question for someone considering dropping out of high school. Let’s look at some of the answers.
High School Graduates earn more money than Dropouts
What’s the big payoff between finishing high school or being a dropout? The government information from 2000 shows high school graduates make about $7000 more per year than high school dropouts. I have seen more current articles on the Internet stating that currently (2010), high school graduates make about $10,000 more per year than a high school dropout.
High school graduates make approximately $10,000 more a year than high school dropouts. $10,000 times a lifetime of work (45 years) means $450,000 more for high school graduates than high school dropouts during their lifetime.
But do people with GEDs make more than Dropouts?
Searching the Internet for articles that discusses the income of people with GEDs versus high school dropouts is difficult. Studies do exist and if you want to pay money to access educational articles you can find them. But free information is harder to find.
However, the state of Tennessee paid for a study entitled the Economic Benefits of a GED. The study was prepared in August of 2001 for the Tennessee Department of Human Services.
Recent studies that examine earnings differences for female populations include Murnane, Willett, and Tyler (2000), who found that the acquisition of a GED for females is associated with a 10–19 % increase in earnings as compared to female dropouts. They added that the impact of a GED on women’s earnings is initially modest but grows over time. They also stressed that researchers who evaluate the effectiveness of GED programs should allow “several years to measure the impact of those programs” and suggested that “a larger time horizon may be needed to capture meaningful results.” Some of the largest earnings differences for female populations were reported by Bos (1995) who found that women who attained a GED had between a 33 % and a 43 % higher monthly earnings than women without a GED.
I wish there were more easily accessible information on the worth of passing the GED versus being a high school dropout. I can only make my own educated estimate.
Optimistically, I believe passing the GED test without any further educational attainment will mean $5000 more per year in earnings than a high school dropout. High school grads make approximately $10,000 more than dropouts. I estimate passing the GED test will earn half as much: $5000 more per year.
But if you use the GED as a stepping stone to a college degree, your earnings increase even more.
Pass the GED, Earn a College Degree, You will Earn More
College graduates make more than high school graduates. You knew that. So passing the GED and then earning a college degree is a path to significantly more income. According to this study, college graduates earn almost twice as much as high school graduates over their lifetime. Here is a quote from page 2 of The Value of a College Degree by Kathleen Porter (2002).
According to the Census Bureau, over an adult’s working life, high school graduates earn an average of $1.2 million; associate’s degree holders earn about $1.6 million; and bachelor’s degree holders earn about $2.1 million (Day and Newburger, 2002).
How much is a GED worth?
Passing the GED alone is worth about $5 more per hour, $10,000 more per year. Using the GED as a stepping stone to earning a college degree will probably increase your income by over $1 million over your working lifetime. Clearly, a GED is worth more than being a high school dropout.
The ultimate financial worth of a GED depends on whether you stop with passing the GED or use the GED as a stepping stone to earning a college degree.