The Impact of Grade Inflation on Higher Education Enrolment and Earnings

Martin Nordin, Gawain Heckley and Ulf-G. Gerdtham

No 2019:1, Working Papers from Lund University, Department of Economics

Abstract: Although grade inflation is unfair and may imply inefficient allocation of human resources, current knowledge of grade inflation effects on individual outcomes is scarce. One explanation is probably the challenge of measuring and estimating causal grade inflation effects. This study examines the consequences of grade inflation at the upper secondary education level on enrolment in higher education and earnings for Sweden. Rigorous diagnostic testing supports our empirical approach. Grade inflation at the school level affects earnings mainly through choice of university and the chosen field of education, rather than through enrolment per se, because attending universities of higher quality and pursuing high-paying fields of education have a substantial impact on earnings. On the other hand, high-skilled students attending upper secondary schools without grade inflation and, unexpectedly, low-skilled women attending "lenient" schools are harmed by this. This causes extensive unfairness and, plausibly, detrimental welfare effects.

Keywords: grade inflation; upper-secondary education; higher education; earnings (search for similar items in EconPapers)
JEL-codes: I20 I21 J24 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2019-01-10
New Economics Papers: this item is included in nep-edu and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Journal Article: The impact of grade inflation on higher education enrolment and earnings (2019)
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