Do gains in test scores explain labor market outcomes?

Using data from the National Education Longitudinal Study of 1988, this article investigates whether students who made relatively large test score gains during high school had larger earnings 7 years after high school compared to students whose scores improved little. In models that control for pre-high school test scores, family background, and demographic characteristics, employed women who gain one standard deviation more than average are predicted to earn 9 percent more than average. These effects are even larger unconditional on employment status, indicating that test score gains influence both the employment status and earnings once employed. For men, however, test score gains are not significantly related to employment status or earnings, except for those men who have low initial test scores.