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Abstract

Does academic course work pay off for students who do not attend college? This paper reviews research on four labor market outcomes of academic courses: hourly wages, employment (versus unemployment), annual earnings, and occupational status. Academic courses are expected to contribute to labor market outcomes by improving cognitive skills. Consequently, the paper also examines possible effects of academic courses on test scores, and of test scores on labor market outcomes. The studies reviewed show small positive effects of academic courses on wages for women, while the results are inconsistent for men. Positive effects on employment appear for both men and women in the one study that was well-suited to address this question. Effects on annual earnings are highly inconsistent, with some studies indicating positive effects, others indicating a negative impact, and still others suggesting no relation at all. Effects on occupational status, by contrast, are consistently positive. Finally, academic courses tend to raise academic skills, and academic skills improve job outcomes. Immediately after high school, students with higher test scores are more likely to be employed but they have little or no advantage in wages. Six years after high school, however, most studies indicate that students whose test scores were higher at the end of high school are earning higher wages. When one compares the 1970s to the 1980s, moreover, this benefit appears to have increased over time. Qualitative research on selection for employment supports the conclusion that academic work in high school helps one find a job and rise in one's occupation more than it aids initial wages.

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