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The Information Value of Central School Exams

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  • Guido Schwerdt

    () (Department of Economics, University of Konstanz, Germany)

  • Ludger Woessmann

    () (University of Munich, Ifo Institute, Germany)

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 percent when obtained on central exams but less than 2 percent when obtained on local exams. Choices of higher-education programs and of occupations do not appear major channels of this result.

Suggested Citation

  • Guido Schwerdt & Ludger Woessmann, 2015. "The Information Value of Central School Exams," Working Paper Series of the Department of Economics, University of Konstanz 2015-14, Department of Economics, University of Konstanz.
  • Handle: RePEc:knz:dpteco:1514
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    File URL: http://www.uni-konstanz.de/FuF/wiwi/workingpaperseries/WP_14_Schwerdt_2015.pdf
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    1. repec:eee:poleco:v:48:y:2017:i:c:p:180-197 is not listed on IDEAS
    2. 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.
    3. repec:iza:izawol:journl:y:2018:n:419 is not listed on IDEAS
    4. repec:cep:cverdp:012 is not listed on IDEAS
    5. Piopiunik, Marc & Schwerdt, Guido & Simon, Lisa & Woessmann, Ludger, 2018. "Skills, Signals, and Employability: An Experimental Investigation," Rationality and Competition Discussion Paper Series 63, CRC TRR 190 Rationality and Competition.
    6. Potrafke, Niklas & Fischer, Mira & Ursprung, Heinrich, 2013. "Does the Field of Study Influence Students' Political Attitudes?," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79934, Verein für Socialpolitik / German Economic Association.
    7. 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.

    More about this item

    Keywords

    Central exit exams; labor-market sorting; earnings; measurement error; difference-in-difference; Germany;

    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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