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THE EFFECT OF HIGH SCHOOL COURSES ON EARNINGS
Heather Rose and Julian R. Betts*
Abstract-We estimate the effect that six types of high school math if the high school curriculumhas little influenceon student
courseshave on students'earningsnearlya decadeaftergraduation.We
use High School and Beyond transcriptdatato differentiatecoursesat a outcomes,then interventionmay be necessaryat an earlier
moredetailedlevel thanin previousresearch.Thisenablesus to show that stage. Second, with the recent eliminationof affirmative
more-advancedcourseshave largereffects than less-advancedones. We action in some states, minorityaccess to highereducation
also provideevidencethatmathcoursescan help close the earningsgap
betweenstudentsfrom low-incomeand middle-incomefamilies.Finally, may suffer.As the returnsto a college educationcontinueto
by incorporatingother academicsubjects,we demonstratehow specific rise, such limited access would aggravateincome equality
course combinationscan explain the earningspremiumrelated to an amongethnic groups.
additionalyear of school.
Carryingforwardthe literaturethatAltonji initiated,we
estimatethe effect that specific high school math courses
I. Introduction (vocationalmath,pre-algebra,algebra/geometry, intermedi-
ate algebra,advancedalgebra,and calculus)have on earn-
DUCATIONhas been at the forefrontof the nation's ings nearlyten years after graduationfor a cohortof stu-
concernsfor decades.Fallingtest scoresthroughoutthe dents who were high school sophomoresin 1980.2We also
1960s and 1970s promptedgovernmentofficials to pre- determinewhethera variedmathcurriculumcan explainthe
scribea new curriculum.In 1983, the NationalCommission earningsgap between studentsof differentethnicities,so-
on Excellence in Educationadvised that all high school cioeconomic statuses,and genders.Our study differs dra-
studentsshouldfollow a more rigorouscurriculum.'Since maticallyfrompreviousstudiesin thatwe use very detailed
then, state policymakershave adoptednew graduationre- transcriptdata to analyze the effects of specific math
quirementsandcurriculumstandardsto satisfythe commis- courses ratherthanjust the total numberof math courses.
sion's recommendations. Ourprincipaldatasourceis HighSchoolandBeyond(HSB).
Althoughmany observersbelieve that an enhancedcur- The paper proceeds as follows. Section II presents a
riculumis the vehicle to improvededucationaloutcomes, theoreticaldiscussionof the link betweenmathematicscur-
little researchhas been done to understandits long-term riculumand wages andreviewsthe existingempiricalliter-
effects.Altonji(1995) marksone of the primaryattemptsby ature.Section III describesthe econometricmodel that we
an economist to systematicallyestablish a direct link be- use to estimatethe effects of curriculumon earningsand
tween curriculumand wages. His work, which examines provides an in-depthdescriptionof our data. Section IV
high school graduatesfrom 1972, producesthe puzzling presentsthe results from our earningsmodels as well as
resultthat the curriculumhas an extremelyweak effect on several robustnesschecks. In section V, we investigate
wages. Studyinggraduatesfrom the late 1970s and early whetherthe curriculumcan explainethnic, socioeconomic,
1980s,LevineandZimmerman(1995) findsomewhatstron- and gender-basedearningsgaps. Section VI concludes.
ger results from some of their model specifications,but
concludethat any potentialeffects of the mathcurriculum II. How Might Curriculum Affect Earnings?
are restrictedto certainsubgroupsof the population(men A Review of Theory and Evidence
with low educationlevels and highly educatedwomen).
Because the notion that the curriculumdoes not matter A. The Human Capital and Signaling Models
raisesseriousquestionsaboutthe effectivenessof theAmer-
Humancapitaltheoryimpliesthata curriculumhas value
ican public school system, it is essential to investigate
becauseit impartsskills thatmakestudentsmoreproductive
further.
and betterrewardedin the labor market.This mechanism
Therearealso moregeneralreasonswhy it is importantto
can work in several ways. Students who take more-
understandthe effects of the high school curriculum.First,
advancedmathclasseslearnskills thatmay applydirectlyto
certainjobs. They may also learnlogic andreasoningskills
Received for publicationOctober 22, 2001. Revision accepted for
publicationJune20, 2003.
that indirectly make them more productive.In addition,
* Public Policy Instituteof California;and Public Policy Instituteof advancedmath may also teach studentshow to learn. Fi-
Californiaand Universityof California,San Diego, respectively.
We would like to thankJeff Owings and RobertAtandaat NCES for nally,even if a job only requiresbasic mathskills, a student
providingus withthe mathandsciencecourseclassifications.Participants
at the annual meetings of the AmericanEconomics Association, the 2Researchby Murnane,Willett,and Levy (1995) and by Groggerand
Associationfor Public Policy Analysis and Management,and numerous Eide (1995) shows that between the 1970s and the 1980s the relative
EconomicsDepartmentseminars,as well as Dan Hamermeshand two importanceof mathtest scoresin determiningearningsgrew substantially
referees,provideduseful insights.We wouldalso like to thankthe Public andthatmathachievementis a betterpredictorof adultearningsthanare
Policy Instituteof Californiafor researchsupportfor this project. othertypes of test scorescommonlyavailable.We thereforefocus mainly
This curriculum,dubbedthe "New Basics,"consistedof fouryearsof on the mathcurriculum,althoughwe broadenthis analysisto includethe
English,threeyearsof math,threeyearsof science, threeyearsof social curriculumin otherfields. Anotherpracticalreasonto focus on mathis
studies,two years of foreignlanguage(for college-boundstudents),and thatthe contentof mathcoursesis muchmorecomparableacrossschools
six monthsof computerscience. thanis the contentof coursesin othersubjects(see Porteret al., 1993).
who has taken advanced math has had an additional chance year possess some intrinsic value? Using the National Lon-
to master those skills.3 gitudinal Survey of the High School Class of 1972 (NLS72),
In contrast to the human capital model, the signaling he models the log wage of each person as a function of
model (Spence, 1973) suggests that math courses do not credits completed in eight different subjects during grades
cause the student to be more productive. Rather,the innately 10-12, standard background variables, and years of post-
more productive, that is, "more able," students choose to secondary education.6 Because the eight curriculum vari-
obtain the specific levels of education that provide signals to ables are highly correlated, he conducts the same analysis
employers. using combinations of courses by subject instead of entering
In the case of the curriculum, the signaling model is the individual courses separately.
applicable at several levels. Students who take a more He uses three methods to estimate the effects of the
rigorous curriculum provide a signal of ability to colleges. curriculum:OLS, OLS with high school fixed effects, and a
College attendance in turn provides a signal of ability to model in which he uses a school's average number of credits
employers.4 It is less clear how taking more high school earned per student within each subject as an instrument for
courses could act as a signal for students who do not attend each student's number of credits earned in that subject. All
college. Perhaps employers of high school graduates look at three approaches lead to similar results. Altonji's overall
high school transcripts-an assumption not generally sup- conclusion is that "the effect of a year equivalent of courses
ported by the research of Bishop (1989). Nonetheless, more is much smaller than the value of one year in high school."
able students may signal that they have taken certain In other words, the whole is greater than the sum of its parts.
courses during job interviews. Even before controlling for background characteristics, the
The signaling-human-capital debate matters for policy. If IV estimates suggest that each additional year of science,
a student gains no productivity by taking a specific math math, English, social studies, and foreign language com-
course but merely buys a signal of ability, then requiring all bined leads to a minuscule 0.3% increase in wages. He finds
students to take that course would not raise labor market stronger curriculum effects if he excludes the negative
productivity or aggregate wages. Further, such a policy effects of English and social studies. An additional year of
change could lead to inefficiencies in the labor market, math, science, and foreign language increases earnings by
because a standardized curriculum would make it more 3.1%.7 Because an additional year of school is estimated to
difficult for employers to identify the most productive increase wages by 7%, Altonji's results lend support to the
students. In contrast, human capital theory contends that view that high school serves as a screening device rather
additional math courses could perhaps make all workers than as a mechanism for human capital formation.
more productive, so there is a causal relation between On the other hand, Altonji's results could be not so much
curriculum and wages. Given the stark difference between a refutation of human capital theory as a sign that schooling
the implications of the two theories, our analyses involve increases human capital in ways quite distinct from the
numerous robustness checks. curriculum. For instance, schooling may improve student's
critical thinking and punctuality. See Bowles, Gintis, and
B. Previous Research
Osborne (2001) for a discussion of these ideas.
The economics literaturehas been slow to incorporatethe Levine and Zimmerman focus on the effect that math and
high school curriculum into wage models, with the excep- science courses have on wages. They use data from two
tions of Altonji (1995) and Levine and Zimmerman (1995).5 main sources: the National Longitudinal Survey of Youth
Altonji asks: Does an extra year of education serve merely (NLSY) and HSB's 1980 senior cohort. Levine and Zim-
as a screening device, or do the courses that make up that merman focus on students who graduated in the late 1970s
through the early 1980s and estimate separate models for
3 Gamoran
(1998) mentionsthese paths and cites other,corroborating men and women. Like Altonji, they use the number of
studiesas well. credits earned in math and science courses (separately) as
4 It is possible that employersdo not use educationalbackgroundas a
their curriculum measures in the HSB data.
signal of ability, but that the student possesses some characteristic,
unobservableto the researcher,that causes him or her to take a more- Levine and Zimmerman find that the number of science
advancedcurriculumandto earnhigherwages. Sucha patternwouldlead classes has very little effect on wages for either males or
to endogeneitybias.Thisis closely relatedto the signalingmodel,because
it recognizes the possibility that differencesin returnsfrom different females. However, their OLS results indicate that an addi-
courses could be caused by selection effects that are the result of tional semester of math increases male wages on average by
underlyingability.We thank DeborahReed and Kim Rueben for this 3% and female wages on average by approximately 2%.
insight.
5 Gamoran(1998)providesan excellentreviewof otherstudiesthathave
undertakensimilargoals. Most of these studiesarequitedatedandnot in 6 The
eight subjectsare science, math,English,social studies,foreign
the economicsliterature.Manyfocus on the effectsof trackingratherthan language,industrialarts, commercialcourses, and fine arts. One credit
specifichigh school courses.Othersthatdo look at coursesrestricttheir refersto an additionalyear's worthof the course.
7 OLS estimatesare
samplesto studentswho obtainno postsecondaryeducation.In unpub- slightlylarger,andOLS estimateswith high school
lished work, Ackerman(2000) also addressesthe issue of the math fixed effects are substantiallylarger.OLS estimateswithoutfixed effects
curriculumbut does not divide up courses in as detaileda manneras predictthatthe effect of an additionalyearof mathematicson earningsis
we do. 1.8%,but thatdisappearsonce abilitycontrolsare added.
HIGH SCHOOL COURSES AND EARNINGS 499
TABLE1.-REGRESSORS INMAINMODELS
INCLUDED
Math curriculum Math credits earned in each of the following six math categories: vocational math, pre-algebra,algebra/geometry,
intermediatealgebra, advanced algebra, and calculus.
Demographicinformation Ethnicity, gender, age in 1991, and maritalstatus in 1991.
Family characteristics Parentalincome, parentaleducation, parentalnativity, and the numberof siblings.
School characteristics Student-teacherratio, books per pupil, length of the school year, school enrollment,percentageof disadvantaged
students,percentageof teachers with a master's degree, district's average spending per pupil, teacher salary,
whether teachers are unionized, and the public school's type (regular,alternative,Cuban Hispanic, or other
Hispanic), geographic region (nine U.S. regions), and urbanicity(rural,urban,or suburban).
Highest degree High school dropout,high school diploma, some postsecondaryeducation (but no degree), a certificate,an
associate's degree, and a bachelor's degree or higher.
Note: Specific categories and means of the above variables are available from the authorson request.
Further, they find that the math effects are limited to men update may be important, given the dramatic increase in the
who have only a high school degree and to women who returns to education in the United States between the late
have completed some college or have earned a college 1970s and the mid-1990s.
degree. For female college graduates, an additional semester
of math during high school leads to a 5.4% increase in
III. Earnings Model and Data
wages. The effect for men with only a high school diploma
is 3.1%. When Levine and Zimmerman use instrumental
variables with Altonji's instrument, the math effects disap- A. Estimatingthe Effects of Curriculumon Earnings
pear. The variation in results across subgroups may be the We construct the following linear model of the log of
result of the small sample sizes within each group. Further-
1991 annual earnings for student i at school s:
more, they are looking at wages only approximately 6 years
after high school graduation, so males may not have settled
into careers indicative of their curriculum and educational In earni, = a + I3oCurricis+ 3lDemois + 32Fami,
attainment. (1)
+ P3Schis+ 34HiDegis+ ?is,
C. Contributionsof This Paper where Currici, denotes the curriculum (a vector of the
A key factor that distinguishes our work from the two credits earned in each of six math course categories);
earlier contributions is our detailed analysis of the types of Demois refers to demographic information;Famsi and Schis
math courses taken. A second distinguishing factor is our are family and school characteristics, respectively; HiDegis
focus on the role, if any, that the high school curriculum represents a series of dummy variables indicating the high-
est degree the student has earned by 1992; and eis is an i.i.d.
plays in creating the well-known wage gaps between work-
ers of different races, ethnicities, and genders. error term.8 The specific regressors included are listed in
Like Levine and Zimmerman, we use the HSB data set. table 1. Each element in the vector of coefficients, 3o,
Unlike Levine and Zimmerman, we use the sophomore describes the effect of an additional credit in the corre-
cohort of that data set, most of whose members graduated sponding math course on the log of earnings. Because we
from high school in 1982, rather than the senior cohort that include the school variables upon which the HSB survey
was stratified, we do not weight the regressions.
graduated in 1980. This alternative sample provides several
Insofar as educational attainment could itself be an en-
advantages. First, our data reflect earnings 10 years after
graduation, rather than only 6 years as with Levine and dogenous function of the high school curriculum, we also
Zimmerman's data. The effects of curriculum on earnings estimate reduced-form models that exclude educational at-
could look quite different for workers in their late twenties tainment. We elaborate on the specific models we estimate
than for a sample of 24-year-olds who may not yet have after describing the data. In section IV, we discuss the issue
settled into careers. Even students who obtained ample of omitted ability extensively and present several alternative
postsecondary education have relevant earnings data in our specifications, including an instrumentalvariables approach
similar to that used by Altonji (1995) and a model that
sample. Second, the transcript data for the 1982 HSB
seniors are much more detailed than the course information includes school fixed effects.
for the 1980 HSB seniors. Third, both Levine and Zimmer-
8 In our initial analyses, we assume the error term is
man and Altonji study a cohort of seniors, thus excluding independent across
students. However, because some shocks may affect all students at a
high school dropouts. Because we begin with a tenth-grade particular school in the same way, we also estimated random-effects
cohort, we are able to include some dropouts in our models. models in which the error term also contains a school-specific component.
Fourth, whereas Altonji examines earnings in the 1970s and The estimated curriculum coefficients and standard errors were nearly
identical those estimated by OLS (the coefficients differed by 0.0002 at
in 1986, and Levine and Zimmerman examine earnings in most, andto the standard errors by even less, depending on the specific
1986, we follow the students into the early 1990s. This model specification), so we report the OLS estimates for simplicity.
500 THE REVIEW OF ECONOMICS AND STATISTICS
2.-THE EFFECTS
TABLE MATHCOURSES
OFSPECIFIC OLS, IV, ANDFIXED-EFFECTS
ONLOGEARNINGS: ESTIMATES
courses. The math coefficients are quite large and vary by employers. The human capital interpretation is that high
the level of the course. An additional year of calculus is school math courses increase a student's efficiency, thus
predicted to increase earnings by approximately 19.5%, increasing his or her chances of attending college, and in
whereas an additional year of algebra/geometry is predicted this way increase the student's productivity further. In the
to increase earnings by approximately 8.0%. Vocational human capital interpretation, column 2 continues to show
math courses, however, seem to have almost no effect on the overall effects of curriculum, whereas the results in
earnings. column 3 show the effect that works directly rather than
Obviously, this first model is simplistic in that it does not indirectly through education. The striking curriculum ef-
take account of many other observable variables that are fects that remain in column 3 after controlling for educa-
known to affect wages. As column 2 shows, adding demo- tional attainment suggest that there may be a direct effect of
graphic, family, and school characteristics causes the effect math curriculum on labor market productivity that works
of math courses at or above the algebra/geometry level to
independently of the final degree attained. In this model, the
drop by 24% to 38%; the lower-level math effects drop by vocational math coefficient is still negative and significant,
even more. This pattern suggests that a portion of the
the coefficient on pre-algebra credits is no longer signifi-
curriculum effects from the previous model should be at-
cant, but the high-level math coefficients remain signifi-
tributed to these other factors.20Nonetheless, all the curric-
cant.21A course in algebra/geometry is estimated to increase
ulum coefficients, except that of pre-algebra, are still quite
earnings by 3.1%, and a calculus course appears to increase
large and statistically significant at the 5% level. An addi-
tional credit in algebra/geometry is predicted to increase earnings by 6.5%.22,23,24
earnings by 6.1%, but advanced algebra is associated with 21 To determinethe extentto whichthe
an 8.8% gain. In this model, vocational math has a signif- negativesign on vocationalmath
is being drivenby studentswho take only vocationalmathcourses and
icant negative coefficient, indicating that taking additional nothinghigher,we reestimatedthe model in column 3 but includeda
vocational math courses leads to lower earnings. This result dummyvariableindicatingwhetherthe studenthadtakenonly vocational
math.The coefficienton this indicatoris -0.065 andis significantat 5%.
might seem to suggest that signaling, rather than human The magnitudeof the vocationalmathcreditscoefficientbecomesslightly
capital formation, is at work. Though this may be, the result less negativeat -0.019, butis now only significantat 10%.Thisindicates
is consistent with either signaling or human capital theories. that,on average,studentswho take only vocationalmathearn less than
those who take vocationalmathand some highermath.It also indicates
There are virtually no students in the sample who take no that even those studentswho take some vocationalmath but also take
math at all. Because the model contains a constant term, some higher math (approximately35% of the studentswho take one
each coefficient is identified by variations in the correspond- vocationalmath course fall into this category) still earn less than the
average studentwho does not take any vocationalmath. Because the
ing variable from the sample average. Thus, in our model, averagestudentdoes not takean entirecreditof vocationalmath,students
the negative sign does not imply that taking an extra who do take one creditare takingit at the expense of a more advanced
vocational math course actually lowers earnings relative to course.Thus, thereis some opportunitycost to takingvocationalmath.
22 The calculuscoefficientis very large relativeto most othersin the
a student who takes no math courses. Rather, the negative model.One effect thatis almostas largeis comingfroma familywith an
coefficient means that taking an additional vocational math income greaterthan $25,000 ratherthan coming from a family with a
course lowers earnings relative to the student who has taken mid-levelincome($20,000to $25,000).Furthermore, thecalculuseffectis
almostgreatenoughto offset the negativeeffect of comingfroma family
the average curriculum, which includes only 0.69 year of with extremelylow income (less than$7,000) relativeto coming froma
vocational math courses. This could indicate that vocational family with mid-levelincome. The calculuseffect also counterbalances
math is a negative ability signal. It could also indicate that the effect of havinga motherwith less thana high school degree rather
than having a motherwith a high school degree. In contrast,standard
the minority of students who take one or more years of measuresof school quality such as the student-teacherratio are not
vocational math have paid the opportunity cost of taking statisticallysignificant.Not even reducingthe percentageof disadvan-
more advanced math courses that would have helped them tagedstudentsat a schoolby 25 percentagepointsoutweighsthe effect of
takinga calculuscourse.
develop human capital needed in the labor market. 23To allay concerns that excluding observationswith earnings not
To further illuminate the path along which these curric- between $2,000 and $75,000 was drivingour results,we estimatedthe
ulum effects work, we control for the ultimate educational column3 model but set all nonmissingearningsvalues less than$2,000
attainment of the student. We add to the previous model a equal to $2,000 (approximately80% of these earningswere $0). This
imputedearningsvalue can be thoughtof as earningsthat individuals
series of dummy variables indicating the student's highest forgo by remainingat home, or it may representa low-value of the
educational degree attained by 1992 and present the results householdwork for those not working.In this case, the resultsare also
in column 3. With these controls, the math curriculum quite similarto those in of column 3 in table 2. As a second solutionto
elicit productivityratherthanvariationsrelatedto laborforce attachment,
coefficients drop by approximately one-half. The signaling we modeledthe log of monthlyearnings(calculatedas annualearningsin
1991 dividedby the numberof monthsthatthe respondentwas employed
interpretationof this drop is that approximately one-half of
the overall effect of high school math reflects the way in duringthatyear).At each stage,the resultingmathcoefficientswerevery
close to those from the originalmodel using annualearnings.Because
which math courses enable more productive students to using the monthlyearningsmeasuremeantlosing 150 moreobservations
attend college and therefore signal their ability to their resultingfrommissingemploymentdata,we chose to use annualearnings
throughoutthis paper.
24 Anotherimportant issue is whetherthe returnsto takingmathcourses
20 See table 1 for a list of the
specificdemographic,family,and school are nonlinear.We reestimatedmodel 3 after adding the squareof the
variablesused. numberof creditstakenin each mathsubject.None of the squaredterms
HIGH SCHOOL COURSES AND EARNINGS 503
We also reestimatedmodel 4 after adding controls for We estimate our earningsmodel using two-stage least
college majorand occupation,both separatelyandtogether. squaresand presentthe resultsin columns5 and 6 of table
The results mirrorour discussion of these extensions to 2.29 Column 5 shows the IV results with no additional
model 3: thereis evidence that college majorand occupa- abilitycontrols,andcolumn6 includesGPA.The resultsin
tion explain some but not all of the impactof high school the two IV specificationsare strikinglysimilar.30
Vocational
mathcourseson earnings.The most strikingchangescame math creditshave a statisticallysignificantnegative effect
when we addedcontrolsfor both majorand occupation,in on earningsof around8%. Creditsearnedin the algebra/
which case vocational math remainedsignificantat 5%, geometrycategoryare significantat the 5% level in both
algebra/geometrywas significantat almost 5%, and inter- specificationsandareof similarmagnitudeat approximately
mediatealgebrawas significantat approximatelythe 10% 8% to 9%. This is a ratherlarge increase from the OLS
level. In a model not shown, wherewe repeatmodel 4 but estimates. It appearsthat the effect of higher-levelmath
withouteducationalattainment,we find that the estimated courseshas been condensedinto the algebra/geometry cat-
impactof mathcoursesrises substantially,similarlyto what egory. It is to
important stressthat the
although higher-level
we show in model 2. math coefficients now have negative signs, they are not
We recalculatedour earlierdecompositionof the sources
of the math effects, but this time using the models that significantlydifferentfrom 0.31
conditionon mathGPA.The resultssuggestthat68%of the
effect works throughstudents'educationalattainmentand High School Fixed Effects: As another robustness
an additional19% works throughstudents'college major check,we use OLS to estimatean earningsmodelwith high
school fixed effects both with and withoutGPA (see col-
and occupation.The unexplainedportion, approximately
umns 7 and 8). Whereasthe IV estimatesshould net out
13%,appearsto work throughothermechanisms.
abilityeffects withineach school,the fixedeffectsestimates
Instrumental Variables Estimation: In another attempt should control for variationsin abilities across schools.
to curbomittedabilitybias, we follow Altonji'slead anduse WithoutGPAin the model, half of the curriculumcoeffi-
a school's averagemath credits earnedin each of the six cients are higherthanfor the comparablemodel in column
mathcategoriesas instrumentsfor the student'sown math 3. Thepre-algebraandalgebra/geometry coefficientsremain
creditsearnedin those categories.The intuitionis that we practically unchanged, and the coefficient on vocational
want to purge the portionof the curriculumeffect that is math is no longer significant. The results with math GPA
related to ability. We use the school's average curriculum to added in addition to the fixed effects are similar to, but
predictthe student'sactualcurriculum,andany deviationof somewhat stronger than, the corresponding model in col-
the student'sactualcurriculumfrom the predictedlevel is umn 4 with GPA but without high school fixed effects.32
assumedto be causedby variationsin ability,thus leaving
the predictedvalue independentof ability.Therefore,if we
use this predictedcurriculumlevel in our model insteadof
the actuallevel, we will be estimatingthe effect of curric- 29 We excludethe student'sown curriculumwhen
calculatingthe school
ulum alone ratherthan the effect of a mix of curriculum, averagecurriculumfor that student.In our second-stageregression,we
ability, and motivation.However, note that if parentsof exclude students who come from schools where the school average
curriculumwas calculatedusing fewerthanfourobservations,causingus
highly motivatedstudentsall flock to the same school, the to exclude approximately4% of the students.The results change only
instrumentwill not fully eliminateabilitybias. (We control minimallyif we changethe requirementfor the numberof observations
for this possibility,thoughratherimperfectly,by including for computingthe averagefromeach school.The numberof studentsper
school rangesfrom 1 to 36, with a medianof approximately12. We tried
dummies for census region and for suburbanand rural an alternative specificationwherewe estimatedthe first-stageregressions
schools.) We returnto this issue after discussing the IV using the largestpossible sample of students,includingthose students
results. whom we excludedfromthe second-stageregressionbecauseof missing
data.
earnings the results
However, changedonly minimally.
30 In fact,the followingresultsalso holdin otherIV modelspecifications
coefficientis slightlysmallerat 0.027 and significantat the 10%level. In thatincludecontrolsfor mathtest scoreandmodelsthatincludebothmath
contrastto the modelwithGPA,controllingfor test scoreyields a calculus GPAand mathtest score.
coefficient that is significantat the 10% level and slightly larger in 31 Given thatfew studentstook the high-levelmathcourses,the quality
magnitudeat 0.055. The math coefficients may change across model of the instrumentmay be reducedfor that course level, which would
specificationsin partbecauseof the falling samplesizes thatresultfrom explainthe lack of precisionin estimatingthese coefficients.
missing data in some of the controls(13% of the regressionsample is 32 F-tests thatthe high school dummiesarejointly equalto 0 produced
missingtest score data).As an additionalway to take accountof student P-values of 0.0001 withoutGPAin the model and 0.00014 with GPAin
motivationand parentalinfluence,we controlledfor a set of attitudinal the model. However,our other models that conditionupon high school
variablesindicatingthe academicinclinationof studentsandparents(such characteristics appearto capturemuchof this variation,withP-valuesfor
as whetherthe parentsclosely monitorthe student'sschoolwork,whether the F-tests of 0.02 regardlessof whetherwe include GPA. The school
the parentsknowwheretheirchildrenareat all times,whetherthe student characteristicsthat were significantat the 5% level were many of the
intendsto go to college, the amountof televisionthe studentwatches,and dummiesindicatingthe stratificationsused to sampleHSB schools, and
how muchtime the studentspendsreadingoutsideof class).Addingthese regiondummies.None of the measuresof school resourceswere signif-
variables,ratherthan GPA, causes even smaller changes in the math icant;the percentageof studentswho were disadvantagedwas the demo-
coefficientsfrom the case of no abilitycontrols. graphiccharacteristicclosest to being significantat the 5% level.
HIGH SCHOOL COURSES AND EARNINGS 505
C. Additional High School Subjects TABLE 3.-THE EFFECTS OF SPECIFIC MATH, ENGLISH, SCIENCE, AND FOREIGN
LANGUAGE COURSES ON LOG EARNINGS: OLS AND IV ESTIMATES
still predicted to have negative, and now even larger, weakly TABLE4.-THE EARNINGSEFFECTOF HYPOTHETICAL
PREDICTED COURSE
DURINGGRADES11 AND 12
COMBINATIONS
significant effects.
School Year Predicted
Unlike some of the earlier literature, we find that the sum Effect
and Level HypotheticalCurriculum
of the parts (that is, the effect of high school courses) can be
10 Dropout No more subjects -0.122**
as large as the whole (that is, the effect of an additional year
(0.036)
of high school, often cited as a 7% increase in earnings),
11 Low No math, average English, secondary physics, 0.021
contingent upon the student taking the right courses. In the no foreign language (0.035)
case of students who take the most demanding courses, 11 Med Intermediatealgebra, average English, 0.054**
curriculum predicts earnings gains of more than 7% per chemistry 1, foreign language (third year) (0.022)
year. This can be seen best by considering some simple 11 High Advanced algebra, advanced English, 0.072**
thought experiments. chemistry 1, foreign language (third year) (0.021)
To compare our estimated effects of a year's worth of 12 Low Same as grade 11 low 0.021
(0.035)
curriculum with the 7% effect of a year's worth of school-
12 Med Advanced algebra, English literature,physics 0.062**
ing, table 4 shows OLS estimates of potential combinations 1, foreign language (fourth year) (0.019)
of high school courses. The first row shows that students 12 High 0.086**
Calculus, advanced English, chemistry 2,
who drop out in tenth grade experience a 12% earnings foreign language (fourth year) (0.037)
deficit compared to those who stay in school (calculated as ** Significant at the 5% level.
Standard errors are in parentheses. Except for the effect of dropping out (which is simply the
the effect of having less than a high school degree in the coefficient on the dropoutdummy variable in column 4 of table 2), the predictedeffects are computed
Table 2, column 4 model). This resonates with the estimated by summingthe individualeffects of the hypotheticalclass list from column 2 of table 3. In other words,
the effects within each academic year (such as grade 12) are measuredrelative to a hypotheticalstudent
7% benefit per year that school provides. The remaining who stays in school that academic year but does not take any math,English, science, or foreign language
courses. The standarderrorsare computed by taking the square root of the variance of the sum of the
rows in the table compare the earnings gain for a student coefficients from the hypotheticalclass list. To compute the effects more easily, we estimate a slightly
different specificationof the column 2 model in table 3 in which we enter the total numberof foreign
who takes the stated set of courses with that of an otherwise language credits rather than the two dummy variables. The coefficients on the other subjects are
identical student who does not take the courses. In each practicallyunchanged.That of foreign language credits becomes 0.014.
TABLE 5.-THE EFFECTS OF AGGREGATE MATH, ENGLISH, SCIENCE, AND FOREIGN LANGUAGE COURSESON LOG EARNINGS: OLS AND IV ESTIMATES
OLS IV
level. Model 2 in table 5 adds GPA to model 1. The year of English, our estimatejumps to 3.6%, comparedto
aggregatemath coefficient is no longer significant.Total 0.6% accordingto Altonji. Still, overall the results seem
Englishcreditsbecome marginallysignificant. highly similarto Altonji'sin that we do not come close to
Column3 takes the first step towardapproximatingAl- "explaining"a 7% increasein earningsfrom attendingone
tonji's table 2, model 7. The main changes are that we more year of school.
remove the school resourcesthat are not includedin Al- Disaggregationof courses taken is the most important
tonji'smodel, and we also excludehigh school dropoutsas innovationwe make, but the use of GPA ratherthan test
Altonji does.38Neither of these differencesbetween Al- scores is a secondaryreasonfor why our resultsare some-
tonji's model and our own seems to mattermuch, whether what more optimistic than Altonji's. Although the math
these changes are made jointly, as shown in the table, or variableis still not significantin eithermodel3 or 4, it does
individually. fall by half when we include test scores ratherthan GPA.
At this point, the major difference between Altonji's Overall,we interpretthis as a sign thatour decision not to
model and our replicationis that we use math GPA as a use high school test scores as a control,because they are
controlfor ability,whereasAltonjiuses test scores.Column endogenous,makes a substantivedifference.
4 of table 5 takesthe final step towardreplicatingAltonji's It is also notablethatthe time framesdiffersignificantly
model. It makes the same restrictionsas the column 3 between our samplesandAltonji's--our earningsobserva-
model,butit includessenioryeartest scoresinsteadof GPA. tions are from 1991, comparedwith 1977 through1986 in
In this replication,aggregatemath credits are not signifi-
Altonji (1995). Because the returnsto educationincreased
cant. English and foreign languagecredits are significant,
but the effects are modest. The main differencebetween markedlybetween the late 1970s and the early 1990s, we
had speculatedthatperhapsmathcurriculummattersmore
these findingsandthose of Altonjiis thatEnglishcreditsin
our model are significant.Altonji reportsthat one year of today than it did in the past. Our results do not provide
strongevidencethatthis is the case, exceptperhapsfor our
math, science, and foreign language is associatedwith a
findingthatin our specificationclosest to Altonji's,English
gain in earningsof approximately1.5%.Our table 5, col- coursesmattermuch more thanhe found.
umn 4, gives an estimateof 1.9%.But when we add in a
The remainingcolumnsin table 5 repeatthe same series
38See the notes to table 5 for more details of how columns 3 and 4 differ of specificationsbut use the IV estimator.Perhapsthe most
from columns 1 and 2 in a bid to mimic the specification used by Altonji notablefindinghere is thatthe coefficienton mathcourses
as closely as possible. takenis neversignificantandis alwaysnegative.Ourearlier
508 THE REVIEWOF ECONOMICS
AND STATISTICS
IV models thatdisaggregatesuggestthatin fact some math white studentsas the omittedgroup.The resultsappearin
coursesdo indeed matter. column 1 of table 6. Consistentwith commonperception,
Overall,we concludethatthe main reasonfor the diver- this simple model shows that Hispanics and blacks earn
gence between our results and those of Altonji is our significantlyless than whites on average-approximately
disaggregationof courses by type; a secondary reason 5.2% and 10%less, respectively.41
appearsto be our decision not to conditionon high school To establish a baseline earningsgap for studentsfrom
test scores because they are an endogenous function of different parentalincome levels, we carry out a similar
courses taken. procedure-estimatingan earningsmodelthatonly contains
The findingthat course type mattershas many implica- parentalincome levels as explanatoryfactors.We measure
tions for curriculumreform.In particular,merelyincreasingthe differences in average earnings relative to students
the numberof math courses requiredof studentsmay not whose parentswere in the middle-incomecategory,thatis,
achieve the desiredeffect. It will be importantto focus on
familiesthatearnedbetween$20,000 and$25,000 a yearin
the type of coursesstudentsarerequiredto takeas well.39In1980.42In this model (shown in column 2 of table 6),
particular,our results suggest that algebra and geometry studentsin the lowest parental-incomecategory(less than
courses should be a fundamentalpart of any curriculum $7,000) earn approximately30% less than studentsfrom
reform. middle-income families, whereas those in the highest
parental-incomegroupearn 10%to 11%more.
V. An Analysis of Earnings Gaps among Ethnic, Next, we estimate a model that conditionson both pa-
rental income and ethnicitywhile takingaccountof demo-
Socioeconomic, and Gender Groups
graphic,family, and school characteristics.The resulting
This sectionexamineswhetherdifferencesin high school earningsgaps are presentedin column 3 of table 6. The
curriculumcontributeto the well-knowngaps in earnings noncurriculumfactorsthat we add in this thirdmodel can
amongworkersof differentraces andethnicities.Similarly, explainalmostall of the ethnicearningsdifferentialsand a
we test whether gaps in earnings related to a person's large portionof the socioeconomicearningsgaps. In this
parentalbackgroundor the person'sgenderin partreflect more realistic model of earnings,the Hispanic and black
variationsin high school courses. earningsgaps disappearentirely.Asian studentsstill expe-
In the early 1980s, mathcourse completionrates varied rience an earningspremiumrelativeto white students,but
considerablyby ethnicity.Nearly 9% of Hispanicstudents the effect is statisticallyweak. Native Americanstudents
and 10% of black studentscompletedmath credits in ad- still experiencean earningsdeficit. Which factors are re-
vanced algebraor calculus,comparedto rates of 22% and sponsiblefor the closurein the Hispanicandblackearnings
43% for white andAsian students,respectively.40
The same gaps? Enteredinto the model on its own, either parental
disparitiesemerge when we examine the numberof credits income or parentaleducationcan explain nearlyall of the
earnedratherthanthe highest course completed.Hispanic, Hispanic gap and approximatelyhalf of the black gap.
black, and Native Americanstudentstendedto earn more Together,the two measures of parentalbackgroundcan
creditsin vocationalmathandfewer creditsat or above the account for the entire earnings gap between whites and
algebra/geometrylevel thanAsian and white students. eitherof these minoritygroups.
Similarly, students from the lowest-income families As column 3 of table 6 also demonstrates,the earnings
(those with parentswho earnedless than $7,000 annually) gaps relatedto parental-incomegroups diminish substan-
were concentratedin the lower-level math courses, with tially aftercontrollingfor the remainingdemographic,fam-
46% failing to progressbeyond vocationalmath. For stu- ily, and school factors,yet they are still present.Students
dents from middle-incomefamilies (those earning$20,000 from the lowest-incomefamilies earn approximately17%
to $25,000), only 19%failed to advancebeyondthatlevel. less thanthose from middle-incomefamilies, and students
Whereas24%of middle-incomestudentstook coursesat or from the highest-incomefamilies now earn
approximately
above the advancedalgebralevel, only 8% of the lowest- 6% more.
income studentsdid. Column 3 also suggests that there is a gender gap in
How much of the earnings gap between members of earnings,with males earning27% more thanfemales.
differentethnic groups or parentalincome groups can be Next, we addthe mathcurriculumto the modelin column
attributedto these variationsin mathematics-course-taking3 to see whetherit can
explainthe ethnic,SES, and gender
behavior?We first estimatea model of earningsthat only differences.The results
appearin column4. Addingthe six
includes ethnicity variables as explanatoryfactors, with
41 These
earnings deficits are smaller than those reportedin other
39 Whengraduation areincreased,thereis the riskof more
requirements literature,because of the HSB sampling scheme. The HSB data set
studentsdroppingout. See Costrell(1994) and Betts (1998) for a theo- includesonly those people who are still in school in the second half of
reticalanalysis,and Lillard(1998) for an empiricalanalysis. theirsophomoreyearin high school.Thus,it excludesstudentswho drop
40These figuresarebasedon everypublicschool observationfor which out of school at an early age, as well as immigrantswho had no U.S.
we have ethnicity and math data. The same course-takingtrends are education.
evidentfor the weightedregressionsampleas well. 42 The income
categoriesin this sectionare expressedin 1980 dollars.
HIGHSCHOOLCOURSESAND EARNINGS 509
AND PARENTALINCOME(BEFOREANDAFTERCURRICULUM
TABLE6.-EARNINGS GAPS BASED ON ETHNICITY IS ADDEDTOTHEMODEL)
distinct math curriculumcontrols changes some of the overallpicturedoes not changeif we also controlfor GPA.
ethnic effects. The curriculumappearsto entirelyexplain These resultsare shown in columns5 and 6. The parental-
the remainingNative American earnings deficit and the income gap between the low- and the middle-incomestu-
Asian earningspremium.In fact, controllingfor curriculum dentsdrops23%dropratherthan27%.Once again,the gap
providesweak evidence (significantat the 10%level) that betweenthe high and middleparental-incomegroupsdoes
Hispanics are predictedto earn 3.6% more than whites not changefromthe modelwithoutcurriculumto the model
given similarcurriculumand backgroundcharacteristics. with curriculum.
The mathcurriculumappearsto be responsiblefor around Finally,we note thatmathcoursestakenexplainnone of
27% of the earnings gap experiencedby students from the observedearningsgap between men and women, re-
lowest-income families relative to middle-incomefami- gardless of whether we control for each student'sGPA.
lies.43The gap becomes insignificantfor the second-lowest Some othermechanismmust be at work here.
family income group($7,000 to $15,000) after addingthe The results on parentalincome may carry important
curriculumto the model. However,studentsfrom the two policy implications.Whereasmany other factors help to
highestparental-income categoriesstill experiencethe same determinethe labormarketsuccess of studentswhose par-
earningspremium thatthey do in the model withoutcurric- ents have average and high incomes, students of low-
ulum. Thus, the curriculumexplainsa large portionof the income families could significantlyimprovetheirearnings
earnings gap between students from low- and medium- prospectswith a better curriculum.Policies aimed at en-
income families, but it does not explain the gap between
couraging and preparinglow-income students to take a
students from high- and medium-incomefamilies.44The more rigorouscurriculumcould yield significantbenefits.
43 This is computedas the percentagechange in the effect of lowest
Althoughwe do not explicitly find that standardizingthe
curriculumcan help narrowthe ethnic earningsgap, the
parentalincome(less than$7,000) fromcolumn3 to column4 of table6.
Includingdetailedmeasuresof the English,science,andforeignlanguage ethnic compositionof studentsin the lowest parentalin-
curriculain the model thatcontrolsfor mathnarrowsthe gap by another come group was such that narrowingthis gap would be a
7%.Addingthe aggregatenumberof mathcreditsearnedin lieu of the six
curriculummeasuresdoes not induce as much of a change in ethnic or step towardnarrowingthe ethnicearningsgap as well: 30%
parentalincomeeffect, furtherindicatingthe contributionthatthese new
detailedmeasuresof curriculamake to the literature. -0.107 once we controlfor curriculum,representinga 13%change;yet
44If we additionallycontrolfor the student'shighesteducationalattain- the earningsgap between middle- and high-incomestudentsdoes not
mentin the column3 andcolumn4 models,the earningsgap betweenthe close. We chose to excludethe highestdegreefromthe displayedresults
lowest and middle parental-incomegroups changes from -0.123 to to show the overallcurriculumeffect.
510 THE REVIEWOF ECONOMICS
AND STATISTICS
of the studentswho came from the lowest-incomefamilies We suspect that part of the answeris that young students
were Hispanic,20% were black, and 34% were white. haveratherimperfectknowledgeof the labormarketreturns
to education,let alone to specific courses. For instance,
VI. Conclusion Betts (1996) surveyed undergraduatesat an elite public
universityand findsthatthoughon averageundergraduates
The mainmessageof this studyis thatmathmatters.The have a reasonablygood knowledgeof the returnsto educa-
mathcoursesthat studentstake in high school are strongly tion in variousfields, the beliefs of individualstudentsare
relatedto students'earningsaround10 yearslater,even after often massivelywrong.It standsto reasonthathigh school
takingaccountof demographic,family, and school charac- students from low-income families, who lack the same
teristics,as well as the student'shighesteducationaldegree windows into the higher education system, have a less
attained,college major,and occupation.Anotherimportant accurateunderstanding of the returnsto educationoverallor
message is that not all math courses are equal. More to taking courses in individualsubjects.A second reason
advancedmathcourseshave a largereffect on earningsthan
why studentsfrom low-income families may not want to
less advancedones. Our results suggest that a curriculum enroll in the most
demandinghigh school courses is that
thatincludesalgebraandgeometryis systematicallyrelated a
they have rather high discountrate.Indeed,the idea that
to higherearningsfor graduatesa decade aftergraduation. discount their futureincome too highly can
young people
As we have stressedthroughoutthe paper,it is not entirely
explain why we have compulsoryattendancelaws. The
clear whetherthe link betweenmathand earningsis causal excessive
discounting of future income is likely to be
or merelyreflectsunobservedvariationsin studentabilityor commonamongthe less affluent.For evidence
motivation.But it is noteworthythat math continues to that particularly
people living in povertyhave higherdiscountratesthan
matter even after controlling for proxies of ability and see Lawrance(1991). A thirdreasonwhy students
average,
motivation,such as math GPA and math test scores, and in povertymay not take "enough"high school math
afterusing instrumentalvariablemethods.The IV estimates living
courses could well be that by the time they reach high
suggestthatalgebra/geometry creditshave the largesteffect
their accumulatededucationaldeficit makes it dif-
on earnings,whereasthe remainingcourseshave insignifi- school,
ficult for them to take furthercourses at gradelevel.
cant effects. Indeed,throughoutthis batteryof robustness
Betterinformationaboutthe realitiesof the labormarket,
tests, creditsearnedin the algebra/geometry categorymost combinedwith
higher standardsfor all students,might do
reliablyremaina statisticallysignificantpredictorof earn- muchto solve the firsttwo
boththe OLSandIV resultspersistwhen problems.The standardsmove-
ings. Furthermore, ment that the United States during the 1990s has
we includeEnglish,science, and foreignlanguagecurricu- swept
lum measuresin the model, althoughsome of these other already led to much clearer, and in generalhigher,require-
types of courses(for example,above-levelEnglish)appear
ments for high school graduationin most states,throughthe
to influenceearningsas well. tightening of course requirementsand, in many cases, the
of
Can gaps in curriculummeasuresexplain gaps in earn- creation high school exit exams. The third issue, that
studentsliving in povertymay be far behindgradelevel by
ings among racial and socioeconomic groups or the gap
relatedto gender?In answeringthis question,it is important the startof high school, is far more problematic.It would
first to take account of variationsin family background. suggest that setting higher course requirementsin high
school could backfireunless at the same time education
Virtuallyall of the earningsgap between whites and most
minority groups can be accountedfor by differences in policymakers closely examinedthe deficienciesin student
family backgroundand, to a far lesser extent, school char- performance at lower gradesand interveneearly enoughin
acteristics,withoutany need to control for curriculum.In students' careers to minimize these deficiencies. Clearly,
contrast,the earningsgap relatedto variationsin parental such interventions could prove costly, and we cannotspec-
income levels or in gender cannot be fully explainedby ulate on the cost-benefit ratio of such interventions.Still,
family and school characteristics.We found no evidence our results do provide some concrete evidence that the
thatmathcoursestakencan explainthe genderpay gap. But benefits of a richer curriculum are real and meaningfulin
the math curriculumcan explain nearlyone-quarterof the size; it is the cost side of the equationthat is less clear.
gap between studentswith parentalincome in the lowest Our results emanate from the detailedmannerin which
and middlegroups.This latterfindingis importantbecause we measure curriculum, and this is a majorcontributionof
it suggests a tool-namely the math curriculum-for in- this study. If we simplyanalyze effect of aggregatemath
the
creasingthe degreeof equityin students'earningsopportu- credits earned, findthatit is an averageof specificmath
we
nities laterin life. course effects. Whenaggregatecreditsin othersubjectsare
Of course, it is difficult to know how in practice to also included,the aggregatematheffect is only marginally
implementthis deceptively simple policy prescriptionfor significantand the effects of English and science subjects
enrichingthe math curriculum.Why do low-income stu- disappearentirely.Furthermore,the aggregatenumberof
dentsfail to takemorehigh school mathif it is truethatthis mathcreditsa studentearnscannotexplainas much of the
effort would substantiallyboost theirearningslaterin life? earningsgap as the creditsin individualcoursescan.
HIGH SCHOOL COURSES AND EARNINGS 511
A perennial problem facing researchers working on the Griliches,Zvi, "Estimatingthe Returnsto Schooling:Some Econometric
economics of education concerns the human-capital- Problems,"Econometrica45:1 (1977), 1-22.
Grogger,Jeff, "SchoolExpendituresand Post-SchoolingEarnings:Evi-
signaling debate. Does education, or in our case the curric- dence from High School and Beyond,"this REVIEW, 78:4 (1996),
ulum, increase earnings by increasing human capital (that is, 628-637.
skills) or simply by signaling preexisting student ability? Grogger,Jeff, and Eric Eide, "Changesin College Skills and the Rise in
the College Wage Premium," Journal of Human Resources 30:2
This issue is of pivotal importance for policymakers. If the (1995), 280-310.
only role that math courses play is to provide more able Ingels, Steven J., KathrynL. Dowd, JohnR. Taylor,VirginiaH. Bartot,
students with an opportunity to signal this fact to the labor MartinR. Frankel,and Paul A. Pulliam,National Longitudinal
Study of 1988-Second Follow-up: Transcript Component Data
market by surpassing other students, then a policy requiring File User's Manual, NCES 94-377 (Washington,DC: National
a more enriched curriculum for all students will not make Centerfor EducationStatistics,1995).
students intrinsically more productive. Lawrance,EmilyC., "Povertyandthe Rateof TimePreference:Evidence
from Panel Data," Journal of Political Economy 99 (February
Although our data cannot provide unequivocal results on 1991), 54-77.
how curriculum affects earnings, our preferred earnings Levine,PhillipB., and DavidJ. Zimmerman,"TheBenefitof Additional
models that condition on math GPA suggest that 68% of the High-School Math and Science Classes for Young Men and
Women," Journal of Business and Economic Statistics 13:2 (1995),
effect works through students' educational attainment and 137-149.
an additional 19% works through students' college major Lillard,Dean R., "Accountingfor Substitutionbetween Credentialsin
and occupation. The unexplained portion, approximately Estimatesof the Returnsto GED and High School Diplomas,"
CornellUniversity,unpublishedmanuscript,Ithica,NY (1998).
13%, appears to work through other mechanisms. Murnane,RichardJ., John B. Willett, and FrankLevy, "The Growing
Furthermore,our controls for student ability (math GPA Importanceof CognitiveSkills in Wage Determination,"this RE-
and test score) suggest that signaling of ability and motiva- VIEW, 77:2 (1995), 251-266.
tion is unlikely to be the only way in which curriculum Porter,A. C., M. W. Kirst, E. J. Osthoff, J. S. Smithson,and S. A.
Schneider, Reform Up Close: An Analysis of High School Mathe-
matters. Unlike some earlier work, we find evidence that matics and Science Classrooms, Consortium for Policy Research
courses taken during high school can indeed explain most of in EducationFinal Report (Madison:Universityof Wisconsin-
the economic returns to a year of schooling. In this sense, as Madison,WisconsinCenterfor EducationResearch,1993).
Spence,Michael,"JobMarketSignalling,"QuarterlyJournalof Econom-
well, our results suggest that education does more than ics 87:3 (1973), 355-374.
signal ability. As public attention continues to focus on such
issues as school spending and class size, this study shows
that it is crucial to remain focused on the heart of the matter:
APPENDIX
what students actually learn in school.
Data
REFERENCES
1. Math Test Score
Ackerman,Deena,"DoThe Math:High School MathematicsClassesand
the Lifetime Earningsof Men,"Departmentof Economics,Uni- The mathtest scorethatwe includedwas basedon a mathtest in which
versityof Wisconsin-Madisonand Universityof Vermont,manu- studentshad 21 minutesto answer38 questions.The questionsrequired
script(2000). them to comparetwo quantitiesand determinewhetherone was greater,
Altonji,JosephG., "TheEffectsof High School Curriculumon Education whetherthey were equal,or whetherthe relationshipwas indeterminable
and Labor Market Outcomes," Journal of Human Resources 30:3 basedon the given data.We usedthe HSB-computed itemresponsetheory
(1995), 409-438. (IRT)scores from this test as our measureof mathtest score.45
Betts,JulianR., "Whatdo StudentsKnowaboutWages?Evidencefroma
Survey of Undergraduates," Journal of Human Resources 31:1 2. Grade Point Average and Number of Credits Earned
(1996), 27-56.
"TheImpactof EducationalStandardson the Level and Distri- We computedthe student'smathGPAon a scale of 0 to 4.3. We took
bution of Earnings," American Economic Review 88:1 (1988), a weightedaverageof the student'sgradepoints for each course,where
266-275. the weights were the numbersof creditsthat the studentearnedfor the
Bishop,HohnH., "Whythe Apathyin AmericanHigh Schools?"Educa- classes. These credits were either 0.25, 0.33, 0.5, or 1, dependingon
tional Researcher 18:42 (1989), 6-10. whetherthe course length was a quarter,trimester,semester,or (more
Bowles, Samuel,HerbertGintis,andMelissaOsborne,"TheDeterminants commonly)a year-longcourse.Weconvertedlettergradesto gradepoints.
of Earnings:A BehaviouralApproach,"Journal of Economic An A received4 points,a B received3 points,a C received2
points,and
Literature,39:4 (2001), 1137-1176. a D received 1 point. We added0.3 points for a plus and deducted0.3
Costrell,RobertM., "A SimpleModel of EducationalStandards," Amer- pointsfor a minus.For example,we counteda B+ as 3.3
points.
ican Economic Review 84:4 (1994), 956-971. If a studentfaileda course,butsubsequentlyretookit andpassedit, we
DuMouchel,William H., and Greg J. Duncan, "Using Sample Survey included the letter grade and credit informationfrom the successful
Weightsin MultipleRegressionAnalyses of StratifiedSamples,"
Journal of the American Statistical Association 78:383 (1983),
535-542. 45 IRTis a "methodof
estimatingachievementlevel by consideringthe
Gamoran,Adam, "The Impact of Academic Course Work on Labor patternof right,wrong,andomittedresponseson all itemsadministered to
Market Outcomes for Youth Who Do Not Attend College: A an individual student. Rather than merely counting right and wrong
ResearchReview," in Adam Gamoranand Harold Himmelfarb responses,the IRTprocedurealso considerscharacteristics of each of the
(Eds.), The Quality of Vocational Education: Background Paper test items, such as theirdifficultyand the likelihoodthat they could be
from the 1994 National Assessment of Vocational Education guessed correctlyby low-abilityindividuals.IRT scores are less likely
(Washington,DC: NationalInstituteon PostsecondaryEducation, thansimplenumber-right formulascoresto be distortedby correctguesses
Libraries,and Lifelong Learning,Office of EducationalResearch on difficultitems if a student'sresponsevector also containsincorrect
and Improvement,U.S. Departmentof Education,1998). answersto easierquestions."See Ingels et al. (1995, p. M-4).
512 THE REVIEW OF ECONOMICS AND STATISTICS
completion of the course in the student's GPA, and ignored the informa- one-year calculus course had a tally of 1 credit for that course category. A
tion from the failed attempt. We believed that it is the final level of success student who took three semesters of a geometry course had a tally of 1.5
in a given course that is likely to have the greater effect on a student's credits for that category. In a few cases, students received a grade of
subsequent educational attainment and earnings. If, however, the student "pass" in a course. We did not include these grades in the GPA calcula-
failed a course and did not repeat it successfully, we included the credit tions, but we did add the number of credits earned to the tally of credits
information in the student's GPA calculation but assigned 0 grade points earned by the student.
to the course. In other words, we gave the student credit for having taken We estimated an alternative specification where we included only the
the course, but lowered the GPA accordingly. courses that the student passed in the GPA calculation and in the tally of
The credit values that we used to compute the GPA also served as our credits that the student earned. The results from our main models did not
measure of the math curriculum. So, for example, a student who took a change when we used this alternative measure.
COURSE
Al. -MATHEMATICS
TABLE CLASSIFICATION
Course Label Included Courses
Non-academic (vocational) General (1 and 2), basic (1, 2, and 3), consumer, technical, vocational, review
Low-academic (pre-algebra) Pre-algebra,algebra 1 (part 1), algebra 1 (part 2), geometry informal
Middle academic I (algebra/geometry) Algebra 1, geometry (plane and solid), unified 1, unified 2
Middle academic II (intermediatealgebra) Algebra 2, unified 3
Advanced I and II (advanced algebra) Algebra 3, algebra-trigonometry,analytic geometry, linear algebra,probability,statistics, pre-calculus
Advanced III (calculus) Advanced placement calculus, calculus-analytic geometry, calculus
The math classification system used by NCES included a separatecategory for pre-calculus(called advanced II), but after some initial analysis, we decided to combine it with the advanced I level.
TABLE
A3.-NUMBEROFADDITIONAL
MISSING As MORERESTRICTIONS
OBSERVATIONS AREENACTED
TABLE
A4.-MISSINGOBSERVATIONS
OUTOF11,724 TOTAL
PUBLIC
SCHOOL
OBSERVATIONS
Type of Missing Observation Number of Missing Observations Missing Observationsout of 11,724 (percent)
Missing earnings data 2,608 22.2
Out-of-rangeearnings data 1,236 10.5
Missing curriculumdata 1,591 13.6
Transferstudents 949 8.1
Students enrolled in postsecondaryeducation 304 2.6
Missing enrollmentdata 2,426 20.7
Transfersand invalid enrollment(enrolled or missing) 255 2.2
Notes: This table documentsthe numberand percentageof missing values for some key variablesin the analysis. Unlike the previous table, the numberof missing values in this table is always calculatedrelative
to the total number (11,724) of public school observations.