High School Exit Exams Don't Matter

Conditioning the award of a high school diploma on passing a high school exit exam is designed to provide a signaling benefit to those who pass it relative to those who don't, given the fact of having earned a diploma more value in the economic and educational marketplace. 

But that doesn't seem to be what actually happens.

This suggests that IQ matters more than the signal of earning a diploma for these students who often receive a "certificate of completion" that the market treats as a high school diploma, even though it is not a true diploma.

Part of why high school dropouts perform so much worse that high school graduates who just barely graduate in the job market is that usually dropping out of high school reflects delinquency and a failure to conform to social norms, rather than serving as a measure of IQ. The diploma signals something, but not academic ability.

For the same reason, even though earning a GED requires more IQ than the average high school graduate, a GED is a less desirable credential than a high school diploma since it is so often earned by someone who is incarcerated, a negative mark that outweighs proving that one has a minimum level of intellectual capacity.

Also, perhaps this is because attempting college and not getting a diploma has been widely adopted as a signal to distinguish high school graduates who are more or less academically capable. Students who just barely pass a high school exit exam aren't likely to attempt to go to college.

Clark and Marotell (2014) . . . compare the career earnings of students who barely passed and those who barely failed high school exit exams - those who failed did not get a diploma, but those who passed did (these were at the end of their education, so a big effect here would give credence to the signalling thesis). They find little evidence of there being a signal effect, and you can see the visualisations . . . below.

From Sam Atis, "Quasi-experiments and Education" Samstack (September 29, 2022) (comparing linear regression to "Regression Discontinuity Design" [where] "an arbitrary cut-off can give you the equivalent of the treatment group and a control group that you get in a randomised control trial.").

If there were a signaling effect from passing a high school exit exam, you would expect that there would be a discontinuity in the trend at the zero line that divides students who passed the exit exam from those who failed it in the charts above. But, there isn't one. 

Two other RDD students on the benefits of education are also interesting:

• Banks and Mazzona (2012) exploit a 1947 change to the minimum school leaving age in the United Kingdom, and find a large and significant effect of one year of education on male memory and executive functioning in old age.

  
  

  Ozier (2018) exploits the fact that the probability of admission to a government secondary school sharply increases if a child gets a score close to the national mean, finding that completing secondary school increases scores on a cognitive ability test by 0.6 standard deviations. Education also seems to increase employment rates and decrease the chance of teen pregnancy among women - although this would be consistent with the signalling thesis.

  These studies also point out another issue. One way to conceptualize a content free IQ test administered to a child is, at least in part, as a potential to benefit from education that still requires education to be fully realized.