School Performance, Score Inflation, and Neighborhood Development

Erich Battistin and Lorenzo Neri

Journal of Labor Economics, 2024, vol. 42, issue 3, 753 - 792

Abstract: We show that score inflation yields residential sorting around what households expect to be better schools, with long-term consequences for the economic geography of neighborhoods. We consider primary school exams in England, where grading standards have triggered an inflation of indicators in the national performance tables since the mid-1990s. Local neighborhoods were gentrified because of school improvements artificially signaled by score inflation. Competition between schools increased, yielding a real improvement in their quality. Effects of score inflation on house prices, deprivation, and local economic activities are identifiable through to the present day.

Date: 2024
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