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The information value of central school exams

Author

Listed:
  • Schwerdt, Guido
  • Wößmann, 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.

Suggested Citation

  • Schwerdt, Guido & Wößmann, Ludger, 2017. "The information value of central school exams," Munich Reprints in Economics 55049, University of Munich, Department of Economics.
    • Handle: RePEc:lmu:muenar:55049
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    Cited by:

    1. 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.
    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. Ludger Woessmann, 2018. "Central exit exams improve student outcomes," World of Labour, LISER, 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. 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.
    6. Lisa Simon, 2019. "Microeconometric Analyses on Determinants of Individual Labour Market Outcomes," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 83, October.
    7. Leschnig, Lisa & Schwerdt, Guido & Zigova, Katarina, 2022. "Central exams and adult skills: Evidence from PIAAC," Economics of Education Review, Elsevier, vol. 90(C).
    8. Stephan Maurer & Guido Schwerdt & Simon Wiederhold, 2023. "Do Role Models Matter in Large Classes? New Evidence on Gender Match Effects in Higher Education," CESifo Working Paper Series 10208, CESifo.
    9. Adler, Katharina & Kosse, Fabian & Nagler, Markus & Rincke, Johannes, 2025. "Earnings expectations of “First-in Family” university students and their role for major choice," Labour Economics, Elsevier, vol. 95(C).
    10. 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.
    11. Lindov, Dalila, 2020. "Teachers and politics," European Journal of Political Economy, Elsevier, vol. 64(C).
    12. Seo, Chunghyeon & Kruis, Nathan E., 2022. "The impact of school’s security and restorative justice measures on school violence," Children and Youth Services Review, Elsevier, vol. 132(C).
    13. Maurer, Stephan & Schwerdt, Guido & Wiederhold, Simon, 2024. "Understanding Gender Match Effects in Higher Education: The Role of Class Size," VfS Annual Conference 2024 (Berlin): Upcoming Labor Market Challenges 302339, Verein für Socialpolitik / German Economic Association.

    More about this item

    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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