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The Long-Run Economic Consequences of High-Stakes Examinations: Evidence from Transitory Variation in Pollution

Avraham Ebenstein, Victor Lavy () and Sefi Roth

American Economic Journal: Applied Economics, 2016, vol. 8, issue 4, 36-65

Abstract: Cognitive performance during high-stakes exams can be affected by random disturbances that, even if transitory, may have permanent consequences. We evaluate this hypothesis among Israeli students who took a series of matriculation exams between 2000 and 2002. Exploiting variation across the same student taking multiple exams, we find that transitory PM2.5 exposure is associated with a significant decline in student performance. We then examine these students in 2010 and find that PM2.5 exposure during exams is negatively associated with postsecondary educational attainment and earnings. The results highlight how reliance on noisy signals of student quality can lead to allocative inefficiency.

JEL-codes: I21 I23 I26 J24 J31 Q51 Q53 (search for similar items in EconPapers)
Date: 2016
Note: DOI: 10.1257/app.20150213
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American Economic Journal: Applied Economics is currently edited by Alexandre Mas

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Handle: RePEc:aea:aejapp:v:8:y:2016:i:4:p:36-65