The Information Value of Central School Exams

Guido Schwerdt and Ludger Woessmann
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Guido Schwerdt: University of Konstanz

CAGE Online Working Paper Series from Competitive Advantage in the Global Economy (CAGE)

Abstract: The central vs. local nature of high-school exit exam systems can have important repercussions on the labor market. By increasing the informational content of grades, central exams may improve the sorting of students by productivity. To test this, we exploit the unique German setting where students from states with and without central exams work on the same labor market. Our difference-in-difference model estimates whether the earnings difference between individuals with high and low grades differs between central and local exams. We find that the earnings premium for a one standard-deviation increase in high-school grades is indeed 6 percent when obtained on central exams but less than 2 percent when obtained on local exams. Choices of higher-education programs and of occupations do not appear major channels of this result.

Keywords: Central exit exams; labor-market sorting; earnings; measurement error; difference-in-difference; Germany JEL Classification: I20; J24; J31 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-ure
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http://www2.warwick.ac.uk/fac/soc/economics/resear ... 3-2016_woessmann.pdf

Related works:
Journal Article: The information value of central school exams (2017)
Working Paper: The information value of central school exams (2017)
Working Paper: The Information Value of Central School Exams (2015)
Working Paper: The Information Value of Central School Exams (2015)
Working Paper: The Information Value of Central School Exams (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:cge:wacage:293

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