IDEAS home Printed from https://ideas.repec.org/a/eee/ecoedu/v40y2014icp152-166.html
   My bibliography  Save this article

Public expenditures, educational outcomes and grade inflation: Theory and evidence from a policy intervention in the Netherlands

Author

Listed:
  • De Witte, Kristof
  • Geys, Benny
  • Solondz, Catharina

Abstract

This article argues that resource expansion can fail to improve actual student performance because it might cause educators to soften grading standards (i.e., induce grade inflation). Our theoretical model shows that, depending on schools’ and students’ reactions to resource changes, the overall effect of resources on education outcomes is ambiguous. Schools, however, have an incentive to adjust their grading structure following resource shifts, such that grade inflation is likely to accompany resource-driven policies. Exploiting a quasi-experimental policy intervention in the Netherlands, we find that additional resources may indeed induce grade inflation, particularly when the resource increase is limited.

Suggested Citation

  • De Witte, Kristof & Geys, Benny & Solondz, Catharina, 2014. "Public expenditures, educational outcomes and grade inflation: Theory and evidence from a policy intervention in the Netherlands," Economics of Education Review, Elsevier, vol. 40(C), pages 152-166.
  • Handle: RePEc:eee:ecoedu:v:40:y:2014:i:c:p:152-166
    DOI: 10.1016/j.econedurev.2014.02.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0272775714000211
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Holmlund, Helena & McNally, Sandra & Viarengo, Martina, 2010. "Does money matter for schools?," Economics of Education Review, Elsevier, vol. 29(6), pages 1154-1164, December.
    2. repec:cup:apsrev:v:102:y:2008:i:03:p:279-301_08 is not listed on IDEAS
    3. Correa, Hector & Gruver, Gene W., 1987. "Teacher-student interaction: A game theoretic extension of the economic theory of education," Mathematical Social Sciences, Elsevier, vol. 13(1), pages 19-47, February.
    4. Berrebi, Claude & Klor, Esteban F., 2008. "Are Voters Sensitive to Terrorism? Direct Evidence from the Israeli Electorate," American Political Science Review, Cambridge University Press, vol. 102(03), pages 279-301, August.
    5. Anne Case & Angus Deaton, 1999. "School Inputs and Educational Outcomes in South Africa," The Quarterly Journal of Economics, Oxford University Press, vol. 114(3), pages 1047-1084.
    6. Brian A. Jacob & Steven D. Levitt, 2003. "Rotten Apples: An Investigation of the Prevalence and Predictors of Teacher Cheating," The Quarterly Journal of Economics, Oxford University Press, vol. 118(3), pages 843-877.
    7. Betts, Julian R, 1998. "The Impact of Educational Standards on the Level and Distribution of Earnings," American Economic Review, American Economic Association, vol. 88(1), pages 266-275, March.
    8. Pierre Koning & Karen Wiel, 2012. "School Responsiveness to Quality Rankings: An Empirical Analysis of Secondary Education in the Netherlands," De Economist, Springer, vol. 160(4), pages 339-355, December.
    9. Eric A. Hanushek, 2003. "The Failure of Input-Based Schooling Policies," Economic Journal, Royal Economic Society, vol. 113(485), pages 64-98, February.
    10. Derek Neal & Diane Whitmore Schanzenbach, 2010. "Left Behind by Design: Proficiency Counts and Test-Based Accountability," The Review of Economics and Statistics, MIT Press, vol. 92(2), pages 263-283, May.
    11. Caroline M. Hoxby, 2000. "The Effects of Class Size on Student Achievement: New Evidence from Population Variation," The Quarterly Journal of Economics, Oxford University Press, vol. 115(4), pages 1239-1285.
    12. Betts, Julian R. & Grogger, Jeff, 2003. "The impact of grading standards on student achievement, educational attainment, and entry-level earnings," Economics of Education Review, Elsevier, vol. 22(4), pages 343-352, August.
    13. Maria De Paola & Vincenzo Scoppa, 2010. "A signalling model of school grades under different evaluation systems," Journal of Economics, Springer, vol. 101(3), pages 199-212, November.
    14. Hans Bonesrønning, 2004. "Do the teachers' grading practices affect student achievement?," Education Economics, Taylor & Francis Journals, vol. 12(2), pages 151-167.
    15. Jishnu Das & Stefan Dercon & James Habyarimana & Pramila Krishnan & Karthik Muralidharan & Venkatesh Sundararaman, 2013. "School Inputs, Household Substitution, and Test Scores," American Economic Journal: Applied Economics, American Economic Association, vol. 5(2), pages 29-57, April.
    16. Oliver Himmler & Robert Schwager, 2013. "Double Standards in Educational Standards – Do Schools with a Disadvantaged Student Body Grade More Leniently?," German Economic Review, Verein für Socialpolitik, vol. 14(2), pages 166-189, May.
    17. Hægeland, Torbjørn & Raaum, Oddbjørn & Salvanes, Kjell G., 2012. "Pennies from heaven? Using exogenous tax variation to identify effects of school resources on pupil achievement," Economics of Education Review, Elsevier, vol. 31(5), pages 601-614.
    18. Figlio, David N. & Lucas, Maurice E., 2004. "Do high grading standards affect student performance?," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 1815-1834, August.
    19. Andrew J. Houtenville & Karen Smith Conway, 2008. "Parental Effort, School Resources, and Student Achievement," Journal of Human Resources, University of Wisconsin Press, vol. 43(2), pages 437-453.
    20. Pierre Koning & Karen van der Wiel, 2013. "Ranking The Schools: How School-Quality Information Affects School Choice In The Netherlands," Journal of the European Economic Association, European Economic Association, vol. 11(2), pages 466-493, April.
    21. Jonah Rockoff & Lesley J. Turner, 2010. "Short-Run Impacts of Accountability on School Quality," American Economic Journal: Economic Policy, American Economic Association, vol. 2(4), pages 119-147, November.
    22. 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.
    23. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, Oxford University Press, vol. 119(1), pages 249-275.
    24. Reback, Randall, 2008. "Teaching to the rating: School accountability and the distribution of student achievement," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 1394-1415, June.
    25. Claude Berrebi & Esteban F. Klor, 2008. "Are Voters Sensitive to Terrorism?: Direct Evidence from the Israeli Electorate," Working Papers 477-1, RAND Corporation.
    26. Kristof De Witte & Chris Van Klaveren, 2012. "Comparing students by a matching analysis -- on early school leaving in Dutch cities," Applied Economics, Taylor & Francis Journals, vol. 44(28), pages 3679-3690, October.
    27. Fiva, Jon H., 2009. "Does welfare policy affect residential choices? An empirical investigation accounting for policy endogeneity," Journal of Public Economics, Elsevier, vol. 93(3-4), pages 529-540, April.
    28. Costrell, Robert M, 1994. "A Simple Model of Educational Standards," American Economic Review, American Economic Association, vol. 84(4), pages 956-971, September.
    29. Philip Babcock, 2010. "Real Costs Of Nominal Grade Inflation? New Evidence From Student Course Evaluations," Economic Inquiry, Western Economic Association International, vol. 48(4), pages 983-996, October.
    30. Joshua D. Angrist & Victor Lavy, 1999. "Using Maimonides' Rule to Estimate the Effect of Class Size on Scholastic Achievement," The Quarterly Journal of Economics, Oxford University Press, vol. 114(2), pages 533-575.
    31. M. De Paola & V. Scoppa, 2007. "Returns to skills, incentives to study and optimal educational standards," Journal of Economics, Springer, vol. 92(3), pages 229-262, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Woo, Seokjin & Lee, Soohyung & Kim, Kyunghee, 2015. "Carrot and stick?: Impact of a low-stakes school accountability program on student achievement," Economics Letters, Elsevier, vol. 137(C), pages 195-199.
    2. Marie Hyland & Richard Layte & Seán Lyons & Selina McCoy & Mary Silles, 2015. "Are Classroom Internet Use and Academic Performance Higher after Government Broadband Subsidies to Primary Schools?," The Economic and Social Review, Economic and Social Studies, vol. 46(3), pages 399-428.
    3. Robert Schwager, 2018. "Majority Vote on Educational Standards," CESifo Working Paper Series 6845, CESifo Group Munich.
    4. Hernández-Julián, Rey & Looney, Adam, 2016. "Measuring inflation in grades: An application of price indexing to undergraduate grades," Economics of Education Review, Elsevier, vol. 55(C), pages 220-232.

    More about this item

    Keywords

    Public expenditures; Grade inflation; Educational attainment; Standardized central exam;

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecoedu:v:40:y:2014:i:c:p:152-166. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.elsevier.com/locate/econedurev .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.