The Effect of High School Exit Exams on Graduation, Employment, Wages and Incarceration

We evaluate the effects of high school exit exams on high school graduation, incarceration, employment and wages. We construct a state/graduation-cohort dataset using the Current Population Survey, Census and information on exit exams. We find relatively modest effects of high school exit exams except on incarceration. Exams assessing academic skills below the high school level have little effect. However, more challenging standards-based exams reduce graduation and increase incarceration rates. About half the reduction in graduation rates is offset by increased GED receipt. We find no consistent effects of exit exams on employment or the distribution of wages.