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The Long Run Human Capital and Economic Consequences of High-Stakes Examinations

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  • Lavy, Victor
  • Ebenstein, Avraham
  • Roth, Sefi

Abstract

Cognitive performance during high-stakes exams can be affected by random disturbances that, even if transitory, may have permanent consequences for long-term schooling attainment and labor market outcomes. We evaluate this hypothesis among Israeli high school students who took a series of high stakes matriculation exams between 2000 and 2002. As a source of random (transitory) shocks to high-stakes matriculation test scores, we use exposure to ambient air pollution during the day of the exam. First, we document a significant and negative relationship between average PM2.5 exposure during exams and student composite scores, post-secondary educational attainment, and earnings during adulthood. Second, using PM2.5 as an instrument, we estimate a large economic return to each point on the exam and each additional year of post-secondary education. Third, we examine the return to exam scores and schooling across sub-populations, and find the largest effects among boys, better students, and children from higher socioeconomic backgrounds. The results suggest that random disturbances during high-stakes examinations can have long-term consequences for schooling and labor market outcomes, while also highlighting the drawbacks of using highstakes examinations in university admissions.

Suggested Citation

  • Lavy, Victor & Ebenstein, Avraham & Roth, Sefi, 2014. "The Long Run Human Capital and Economic Consequences of High-Stakes Examinations," CEPR Discussion Papers 10308, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:10308
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    Cited by:

    1. Marcotte, Dave E., 2015. "Allergy test: Seasonal allergens and performance in school," Journal of Health Economics, Elsevier, vol. 40(C), pages 132-140.
    2. Boyce, James K. & Zwickl, Klara & Ash, Michael, 2016. "Measuring environmental inequality," Ecological Economics, Elsevier, vol. 124(C), pages 114-123.
    3. Anthony Heyes & Nicholas Rivers & Brandon Schaufele, 2016. "Politicians, Pollution and Performance in the Workplace: The Effect of PM on MPs," Working Papers 1616E, University of Ottawa, Department of Economics.
    4. Rebecca Diamond & Petra Persson, 2016. "The Long-term Consequences of Teacher Discretion in Grading of High-stakes Tests," NBER Working Papers 22207, National Bureau of Economic Research, Inc.

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    More about this item

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • 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

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