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Grade inflation, social background, and labour market matching

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  • Schwager, Robert

Abstract

A model is presented where workers of differing abilities and from different social backgrounds are assigned to jobs based on grades received at school. It is examined how this matching is affected if good grades are granted to some low-ability students. Such grade inflation is shown to reduce the aggregate wage of the lower class workers because employers use social origin as a signal for productivity if grades are less than fully informative. Moreover, the high-ability students from the higher class may benefit from grade inflation since this shields them from the competition on the part of able students from the lower classes.

Suggested Citation

  • Schwager, Robert, 2012. "Grade inflation, social background, and labour market matching," Journal of Economic Behavior & Organization, Elsevier, vol. 82(1), pages 56-66.
    • Handle: RePEc:eee:jeborg:v:82:y:2012:i:1:p:56-66
    DOI: 10.1016/j.jebo.2011.12.012
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    Cited by:

    1. Alessandro Tampieri, 2016. "Social background effects on school and job opportunities," Education Economics, Taylor & Francis Journals, vol. 24(5), pages 496-510, September.
    2. Robert Schwager, 2018. "Majority Vote on Educational Standards," CESifo Working Paper Series 6845, CESifo.
    3. repec:got:cegedp:143 is not listed on IDEAS
    4. Lucifora, Claudio & Tonello, Marco, 2015. "Cheating and social interactions. Evidence from a randomized experiment in a national evaluation program," Journal of Economic Behavior & Organization, Elsevier, vol. 115(C), pages 45-66.
    5. Ehlers, Tim & Schwager, Robert, 2012. "Honest grading, grade inflation and reputation," University of Göttingen Working Papers in Economics 143, University of Goettingen, Department of Economics.

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    More about this item

    Keywords

    Education; Grading; Standards; Assignment; Social mobility;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory

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