The Long-term Consequences of Teacher Discretion in Grading of High-stakes Tests

Rebecca Diamond and Petra Persson

No 22207, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We examine the long-term consequences of teacher discretion in grading of high-stakes tests. Bunching in Swedish math test score distributions reveal that teachers inflate students who have “a bad test day,” but do not to discriminate based on immigrant status or gender. By developing a new estimator, we show that receiving a higher grade leads to far-reaching educational and earnings benefits. Because grades do not directly raise human capital, these results emphasize that grades can signal to students and teachers within the educational system, and suggest important dynamic complementarities between students’ effort and their perception of their own ability.

JEL-codes: I20 J24 (search for similar items in EconPapers)
Date: 2016-04
New Economics Papers: this item is included in nep-edu, nep-hrm, nep-lma, nep-pke and nep-ure
Note: ED LS PE
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