A signalling model of school grades: centralized versus decentralized examinations
AbstractIn this paper we examine the signalling value for skills of different examination systems in relation to errors that may affect grades obtained by students. We show that more precise evaluation systems, being associated to a higher reactivity of wages to school grades, induce an higher level of student effort. However, the effect is heterogeneous, low ability students tend to react less compared to high ability students. Moreover, from our analysis, it emerges that individuals endowed with low abilities may prefer less accurate evaluation systems. Nevertheless, when productivity increases the convenience of these systems reduces and the number of individuals preferring them shrinks. Our analysis highlights an important trade-off between centralized and decentralized evaluation systems. Frequent evaluations, typical of decentralized systems, reduce the impact on grades of errors that influence student performance and by this way diminish signal noise, on the other hand, different teachers generally adopt different performance assessment standards, and this tends to produce noisier evaluations. Conversely, centralized systems use common evaluation standards, but their frequency is limited by relevant administration costs and then produce evaluations that are more affected by errors influencing student performance. In the last part of the paper we investigate the relationship between the optimal class size and evaluation systems. We show that under decentralized evaluation systems class size also affects the signal noise. In fact, larger classes may reduce the frequency of evaluations undertaken by teachers.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University of Zurich, Institute for Strategy and Business Economics (ISU) in its series Economics of Education Working Paper Series with number 0025.
Length: 19 pages
Date of creation: May 2008
Date of revision:
signalling modell; school grades;
Other versions of this item:
- De Paola, Maria & Scoppa, Vincenzo, 2008. "A signalling model of school grades: centralized versus decentralized examinations," MPRA Paper 7866, University Library of Munich, Germany.
- D02 - Microeconomics - - General - - - Institutions: Design, Formation, and Operations
- H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
- I28 - Health, Education, and Welfare - - Education - - - Government Policy
This paper has been announced in the following NEP Reports:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bishop, John H. & Woessmann, Ludger, 2002.
"Institutional Effects in a Simple Model of Educational Production,"
IZA Discussion Papers
484, Institute for the Study of Labor (IZA).
- John Bishop & Ludger Wossmann, 2004. "Institutional Effects in a Simple Model of Educational Production," Education Economics, Taylor & Francis Journals, vol. 12(1), pages 17-38.
- Bishop, John H. & Ludger Woessmann, 2002. "Institutional Effects in a Simple Model of Educational Production," Royal Economic Society Annual Conference 2002 29, Royal Economic Society.
- John H. Bishop & Ludger Wößmann, 2001. "Institutional Effects in a Simple Model of Educational Production," Kiel Working Papers 1085, Kiel Institute for the World Economy.
- Bishop, John H. & Wößmann, Ludger, 2004. "Institutional effects in a simple model of educational production," Munich Reprints in Economics 20279, University of Munich, Department of Economics.
- Bishop, John H, 1997. "The Effect of National Standards and Curriculum-Based Exams on Achievement," American Economic Review, American Economic Association, vol. 87(2), pages 260-64, May.
- De Fraja, Gianni & Landeras, Pedro, 2006.
"Could do better: The effectiveness of incentives and competition in schools,"
Journal of Public Economics,
Elsevier, vol. 90(1-2), pages 189-213, January.
- Gianni De Fraja & Pedro Landeras, . "Could Do Better: The Effectiveness of Incentives and Competition in Schools," Discussion Papers 02/11, Department of Economics, University of York.
- Gianni De Fraja & Pedro Landeras, 2004. "Could do Better: The Effectiveness of Incentives and Competition in Schools," CEIS Research Paper 48, Tor Vergata University, CEIS.
- Victor Lavy, 2009.
"Performance Pay and Teachers' Effort, Productivity, and Grading Ethics,"
American Economic Review,
American Economic Association, vol. 99(5), pages 1979-2011, December.
- Victor Lavy, 2004. "Performance Pay and Teachers' Effort, Productivity and Grading Ethics," NBER Working Papers 10622, National Bureau of Economic Research, Inc.
- Bishop, John H. & Mane, Ferran, 2001. "The impacts of minimum competency exam graduation requirements on high school graduation, college attendance and early labor market success," Labour Economics, Elsevier, vol. 8(2), pages 203-222, May.
- Baker, George & Gibbons, Robert & Murphy, Kevin J, 1994.
"Subjective Performance Measures in Optimal Incentive Contracts,"
The Quarterly Journal of Economics,
MIT Press, vol. 109(4), pages 1125-56, November.
- George Baker & Robert Gibbons & Kevin J. Murphy, 1993. "Subjective Performance Measures in Optimal Incentive Contracts," NBER Working Papers 4480, National Bureau of Economic Research, Inc.
- Canice Prendergast, 1999. "The Provision of Incentives in Firms," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 7-63, March.
- Glewwe, Paul & Kremer, Michael, 2006. "Schools, Teachers, and Education Outcomes in Developing Countries," Handbook of the Economics of Education, Elsevier.
- David N. Figlio & Lawrence S. Getzler, 2002. "Accountability , Ability and Disability: Gaming the System," NBER Working Papers 9307, National Bureau of Economic Research, Inc.
- Lillard, Dean R. & DeCicca, Philip P., 2001. "Higher standards, more dropouts? Evidence within and across time," Economics of Education Review, Elsevier, vol. 20(5), pages 459-473, October.
- Bishop, John, 2006. "Drinking from the Fountain of Knowledge: Student Incentive to Study and Learn - Externalities, Information Problems and Peer Pressure," Handbook of the Economics of Education, Elsevier.
- Thomas S. Dee & Brian A. Jacob, 2006. "Do High School Exit Exams Influence Educational Attainment or Labor Market Performance?," NBER Working Papers 12199, National Bureau of Economic Research, Inc.
- Bishop, J., 1997. "The Effect of national Standards and Curriculum-Based Exams on Achievement," Papers 97-01, Cornell - Center for Advanced Human Resource Studies.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Johannes Meuer).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.