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The information value of central school exams

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  • Schwerdt, Guido
  • Woessmann, Ludger

Abstract

The central vs. local nature of high-school exit exam systems can have important repercussions on the labor market. By increasing the informational content of grades, central exams may improve the sorting of students by productivity. To test this, we exploit the unique German setting where students from states with and without central exams work on the same labor market. Our difference-in-difference model estimates whether the earnings difference between individuals with high and low grades differs between central and local exams. We find that the earnings premium for a one standard-deviation increase in high-school grades is indeed 6% when obtained on central exams but less than 2% when obtained on local exams. Choices of higher-education programs and of occupations do not appear major channels of this result.

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  • Schwerdt, Guido & Woessmann, Ludger, 2017. "The information value of central school exams," Economics of Education Review, Elsevier, vol. 56(C), pages 65-79.
  • Handle: RePEc:eee:ecoedu:v:56:y:2017:i:c:p:65-79
    DOI: 10.1016/j.econedurev.2016.11.005
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    Cited by:

    1. Ludger Woessmann, 2016. "The Importance of School Systems: Evidence from International Differences in Student Achievement," Journal of Economic Perspectives, American Economic Association, vol. 30(3), pages 3-32, Summer.
    2. Puhani, Patrick A. & Yang, Philip, 2020. "Does increased teacher accountability decrease leniency in grading?," Journal of Economic Behavior & Organization, Elsevier, vol. 171(C), pages 333-341.
    3. Ludger Woessmann, 2018. "Central exit exams improve student outcomes," IZA World of Labor, Institute of Labor Economics (IZA), pages 419-419, January.
    4. Piopiunik, Marc & Schwerdt, Guido & Simon, Lisa & Woessmann, Ludger, 2020. "Skills, signals, and employability: An experimental investigation," European Economic Review, Elsevier, vol. 123(C).
    5. Fischer, Mira & Kauder, Björn & Potrafke, Niklas & Ursprung, Heinrich W., 2017. "Support for free-market policies and reforms: Does the field of study influence students' political attitudes?," European Journal of Political Economy, Elsevier, vol. 48(C), pages 180-197.
    6. Lindov, Dalila, 2020. "Teachers and politics," European Journal of Political Economy, Elsevier, vol. 64(C).
    7. repec:cep:cverdp:012 is not listed on IDEAS
    8. Potrafke, Niklas & Fischer, Mira & Ursprung, Heinrich, 2013. "Does the Field of Study Influence Students' Political Attitudes?," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79934, Verein für Socialpolitik / German Economic Association.

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    More about this item

    Keywords

    Central exit exams; Labor-market sorting; Earnings; Measurement error; Difference-in-difference; Germany;
    All these keywords.

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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