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Since the late 1970s, an increasing number of states have required students to pass statewide high school exit examinations (HSEEs) in order to graduate. States have usually adopted HSEEs in response to the perception that a substantial number of graduates lack skills that are required for success in the modern economy. What do these educational reforms mean for students' postsecondary economic and labor market prospects? The central hypothesis of the study presented here was that state HSEE policies have the effect of widening gaps in labor force status and earnings between young people who have high school diplomas and those who do not. To test this hypothesis, the authors modeled the association between state HSEE policies and these labor market outcomes using data from the 1980-2000 U.S. censuses and the 1984-2002 Outgoing Rotation Groups of the Current Population Survey. The results revealed no evidence that state HSEEs positively affect labor force status or earnings or that the connections between state HSEE policies and these outcomes vary by students' race/ethnicity or the level of difficulty of state HSEEs.
Since the late 1970s, a growing number of states have required students to pass statewide1 high school exit examinations (HSEEs) to earn high school diplomas. Although state HSEEs have traditionally been minimum-competency tests of basic skills, many states have recently moved to more challenging tests of higher-order skills. Members of the high school class of 2006 faced state HSEE requirements in 22 states; other states are in the process of implementing new state HSEE requirements. Because many larger states have adopted these policies, about two-thirds of all American high school students now face state-mandated HSEE requirements (Warren 2007).
States have generally adopted HSEEs in response to the perception that many high school graduates lack the skills required for success in the "new economy" and that requiring students to pass a high-stakes test that assesses their mastery of basic skills will make the high school diploma more meaningful to employers. Particularly motivating was a much-publicized report by the National Commission on Excellence in Education (1983), which began:
Our Nation is at risk. Our once unchallenged preeminence in commerce, industry, science, and technological innovation is being overtaken by competitors throughout the world. This report is concerned with only...