How Performance Information Affects Human-Capital Investment Decisions: The Impact of Test-Score Labels on Educational Outcomes

John P. Papay, Richard Murnane and John B. Willett

No 17120, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Students receive abundant information about their educational performance, but how this information affects future educational-investment decisions is not well understood. Increasingly common sources of information are state-mandated standardized tests. On these tests, students receive a score and a label that summarizes their performance. Using a regression-discontinuity design, we find persistent effects of earning a more positive label on the college-going decisions of urban, low-income students. Consistent with a Bayesian-updating model, these effects are concentrated among students with weaker priors, specifically those who report before taking the test that they do not plan to attend a four-year college.

JEL-codes: I20 I21 J24 (search for similar items in EconPapers)
Date: 2011-06
New Economics Papers: this item is included in nep-edu, nep-hrm, nep-lab and nep-ure
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Citations: View citations in EconPapers (12)

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