HSEEs were introduced to verify that graduating students in high school had mastered the core curriculum (CEP, 2004). However, it has been suggested that such high-stakes exams can prompt minority and low-achieving students to leave high school early (Center on Education Policy, 2006b, Garcia and Gopal, 2003, Jacob, 2001 and Warren et al., 2006). Unfortunately, despite the vast and rapid adoption of HSEEs, there is very little causal research on their benefits, including whether exit exams effectively raise students’ academic skills. Additionally, most of the studies that have looked HSEEs show mixed evidence on the association between state HSEE policy and state-level dropout and graduation rates. Martorell (2004) first explored the causal relationship between failing the HSEE and various student-level academic outcomes. He concluded that the HSEE in Texas in the 1990s did not discourage test failers to drop out early, but that failing the exam reduced post-secondary attainment.