We use a regression discontinuity design to examine students' responses to the negative incentive brought on by being placed on academic probation. Consistent with a model of introducing performance standards in which agents respond differently based on ability, we find that being placed on probation at the end of the first year discourages some students from returning to school while improving the performance of those who return. Contrary to the predictions of the model when ability is known, we find that heterogeneous discouragement effects result in high ability students having a greater overall dropout rate near the cutoff than lower ability students. The result can be explained by extending the model to allow for the performance standard to also affect self confidence (ability expectations). We also consider effects by gender and find that being placed on probation more than doubles the probability that men drop out but has no such discouragement effect for women.
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
14261.
Length: Date of creation: Aug 2008 Date of revision: Handle: RePEc:nbr:nberwo:14261
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Find related papers by JEL classification: D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General I20 - Health, Education, and Welfare - - Education - - - General
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Tor Eriksson & Anders Poulsen & Marie-Claire Villeval, 2008.
"Feedback and Incentives : Experimental Evidence,"
Working Papers
0812, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure.
[Downloadable!]
Arnaud Chevalier & Steve Gibbons & Andy Thorpe & Martin Snell & Sherria Hoskins, 2007.
"Students' Academic Self-Perception,"
IZA Discussion Papers
3031, Institute for the Study of Labor (IZA).
[Downloadable!]
Other versions:
Arnaud Chevalier & Steve Gibbons & Andy Thorpe & Sherria Hoskins, 2007.
"Students' Academic Self Perception,"
Working Papers
200729, Geary Institute, University College Dublin.
[Downloadable!]