How Performance Information Affects Human-Capital Investment Decisions: The Impact of Test-Score Labels on Educational Outcomes
AbstractStudents 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.
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Date of creation: Jun 2011
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Find related papers by JEL classification:
- I20 - Health, Education, and Welfare - - Education - - - General
- 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-07-02 (All new papers)
- NEP-EDU-2011-07-02 (Education)
- NEP-HRM-2011-07-02 (Human Capital & Human Resource Management)
- NEP-LAB-2011-07-02 (Labour Economics)
- NEP-URE-2011-07-02 (Urban & Real Estate Economics)
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