Do High Schools Designed for Adults Improve Graduation Rates and Boost Earnings in the Labor Market?

The study investigates whether high schools tailored for adults improve graduation rates and boost earnings. Using administrative data from The Excel Center (TEC), a tuition-free public charter school network for adults, the researchers analyze employment and earnings records of 11,079 applicants over five years. They compare TEC graduates to non-enrolling applicants and those who withdrew. Findings show that graduates experience a 38% increase in quarterly earnings ($849 more) after five years, largely due to sectoral switching and credential attainment. Results suggest that adult high schools effectively enhance labor market outcomes, offering substantial returns on investment in later-life education.

Full Citation and Link to Article

Brough, Rebecca, David C. Phillips, and Patrick S. Turner. 2024. "High Schools Tailored to Adults Can Help Them Complete a Traditional Diploma and Excel in the Labor Market." American Economic Journal: Economic Policy, 16(4): 34–67. https://doi.org/10.1257/pol.20230053

Extended Summary

Central Research Question

The study investigates whether high schools designed for adults improve educational attainment and labor market outcomes. Specifically, it examines the impact of The Excel Center (TEC), a tuition-free public charter school network for adults, on high school graduation rates and earnings. The authors seek to determine if adult learners who complete a traditional high school diploma experience substantial earnings increases compared to their non-enrolled or non-completing peers. The research addresses a critical gap in the literature on adult education by focusing on full high school diplomas rather than alternative credentials like the GED, which have shown limited economic benefits.

Previous Literature

The economic returns to a high school diploma have been well-documented for traditional students. Prior research, including studies by Angrist and Krueger (1991) and Oreopoulos (2006), indicates that completing high school leads to significantly higher earnings over a lifetime. However, research on alternative credentials, such as the General Educational Development (GED) test, suggests that these do not provide the same labor market benefits as a traditional diploma. Studies by Jepsen, Mueser, and Troske (2016) and Heckman, Humphries, and Mader (2011) argue that the GED functions more as an assessment rather than a means of skill acquisition, which may explain its limited impact on earnings.

Despite the economic benefits of a high school diploma, millions of adults in the United States remain without one, and options for earning a diploma later in life are scarce. Policy constraints in 18 states prevent adults from earning a full high school diploma, leaving the GED as the only available alternative. Previous research has focused on dropout prevention and vocational training rather than pathways for adults to complete traditional diplomas. This study fills that gap by analyzing TEC, a program designed to remove barriers such as child care, transportation, and flexible scheduling to help adults return to school and graduate.

Data

The study utilizes administrative data from TEC applicants between January 2013 and June 2015, totaling 11,079 individuals. The researchers link these records with state-level administrative data, including earnings from the Indiana Department of Workforce Development and educational records from the Indiana Department of Education.

The dataset includes information on:

High school enrollment and graduation records
Earnings and employment history before and after TEC enrollment
Postsecondary credits and credentials earned
Demographic characteristics such as age, gender, and race

To ensure comparability, the researchers focus on a balanced panel of individuals with five years of pre- and post-application earnings data. They compare three groups: (1) TEC graduates, (2) TEC enrollees who did not complete the program, and (3) individuals who applied but never enrolled.

Methods

The study employs a difference-in-differences approach with inverse propensity score weighting to estimate the causal effect of earning a diploma through TEC. This method accounts for potential selection bias by controlling for pre-application earnings trends and demographic differences among applicants.

The authors compare labor market outcomes before and after TEC enrollment for graduates versus non-graduates, assuming that any earnings differences between these groups after enrollment reflect the effect of completing a diploma. Key specifications include:

Fixed Effects Models: The analysis controls for individual-level fixed effects to account for time-invariant differences between graduates and non-graduates.
Inverse Propensity Score Weighting (IPW): This method adjusts for differences in pre-application earnings trends and demographic factors, ensuring that the treatment and control groups are comparable.
Event Study Framework: The authors estimate earnings trajectories over time to assess whether trends differ between TEC graduates and other applicants.

To test for robustness, they also conduct subgroup analyses based on demographic characteristics and examine alternative comparison groups, such as enrollees who dropped out due to employment opportunities.

Findings and Size Effects

The study finds strong evidence that earning a diploma through TEC significantly improves labor market outcomes. Key findings include:

Earnings Growth: Graduates experience a 38% increase in quarterly earnings ($849 more) five years after applying, compared to non-enrolling applicants. This translates to an annual earnings increase of approximately $3,400.
Employment Stability: Graduates are more likely to be employed consistently and in higher-paying industries. They experience a 1.28-quarter increase in employment stability over five years.
Sectoral Mobility: TEC graduates transition into higher-paying industries, particularly healthcare and skilled trades, while non-graduates remain concentrated in lower-wage sectors such as hospitality and retail.
Comparisons to Alternative Credentials: The earnings returns for a TEC diploma are substantially higher than those typically reported for GED holders, aligning more closely with returns seen for associate’s degree holders.

Conclusion

This study provides strong evidence that high schools designed for adults can generate substantial economic benefits. By offering tailored curricula, support services, and flexible scheduling, TEC enables adult learners to complete a traditional diploma and significantly improve their earnings and job stability. These findings challenge the notion that later-life educational interventions yield low returns, suggesting that well-structured programs can successfully help adults re-enter the workforce in better-paying roles.

The policy implications are significant. Many states currently lack pathways for adults to earn a high school diploma, which limits economic mobility for millions of individuals. Expanding adult high school programs could yield high returns on public investment, as TEC demonstrates that the financial benefits far exceed the costs. Future research could explore similar programs in other states and assess the long-term impact of adult high school completion on career progression and wealth accumulation.