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Getting Lucky: The Long-Term Consequences of Exam Luck

Author

Listed:
  • Fanny Landaud
  • Éric Maurin
  • Barton Willage
  • Alexander L.P. Willén

Abstract

This paper studies the impact of exam luck on individuals’ education and labor market success. We leverage unique features of the Norwegian education system that produce random variation in the content of the exams taken by students at the end of high school. Lucky students take exams in subjects they are better at, and we show that this generates significant improvements in both their high school GPA and diploma probability. Subsequently, exam luck generates substantial and persistent wage differentials across otherwise identical individuals. These luck-induced wage effects are of a similar magnitude as those generated by well-known education inputs, such as parental education and teacher quality.

Suggested Citation

  • Fanny Landaud & Éric Maurin & Barton Willage & Alexander L.P. Willén, 2022. "Getting Lucky: The Long-Term Consequences of Exam Luck," CESifo Working Paper Series 9570, CESifo.
    • Handle: RePEc:ces:ceswps:_9570
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    File URL: https://www.cesifo.org/DocDL/cesifo1_wp9570.pdf
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    References listed on IDEAS

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    1. Justine S. Hastings & Christopher A. Neilson & Seth D. Zimmerman, 2013. "Are Some Degrees Worth More than Others? Evidence from college admission cutoffs in Chile," NBER Working Papers 19241, National Bureau of Economic Research, Inc.
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    3. Zachary Bleemer & Aashish Mehta, 2022. "Will Studying Economics Make You Rich? A Regression Discontinuity Analysis of the Returns to College Major," American Economic Journal: Applied Economics, American Economic Association, vol. 14(2), pages 1-22, April.
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    6. Cohn, Elchanan & Cohn, Sharon & Balch, Donald C. & Bradley, James Jr., 2004. "Determinants of undergraduate GPAs: SAT scores, high-school GPA and high-school rank," Economics of Education Review, Elsevier, vol. 23(6), pages 577-586, December.
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    Cited by:

    1. Graetz, Georg, 2023. "Imperfect Signals," IZA Discussion Papers 16104, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    luck; fairness; wage differentials; returns to education; high-stakes exams;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • I26 - Health, Education, and Welfare - - Education - - - Returns to Education
    • 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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