University Competition, Grading Standards and Grade Inflation
We develop a model of strategic grade determination by universities distinguished by their distributions of student academic abilities. Universities choose grading standards to maximize total wages of graduates. Job placement and wages hinge on a ﬁrm’s productivity assessment given a student’s university, grade and productivity signal. We identify conditions under which better universities set lower grading standards, exploiting the fact that ﬁrms cannot distinguish between “good” and “bad” “A”s. In contrast, a social planner sets stricter standards at better universities. We show how increases in skilled jobs drive grade inﬂation, and determine when grading standards fall faster at better schools.
|Date of creation:||04 Nov 2010|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://mpra.ub.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Costrell, Robert M, 1994. "A Simple Model of Educational Standards," American Economic Review, American Economic Association, vol. 84(4), pages 956-71, September.
- Talia Bar & Asaf Zussman, 2012. "Partisan Grading," American Economic Journal: Applied Economics, American Economic Association, vol. 4(1), pages 30-48, January.
- Heather Rose & Julian R. Betts, 2004. "The Effect of High School Courses on Earnings," The Review of Economics and Statistics, MIT Press, vol. 86(2), pages 497-513, May.
- William Chan & Hao Li & Wing Suen, 2005.
"A Signaling Theory of Grade Inflation,"
tecipa-222, University of Toronto, Department of Economics.
- Coate, S. & Loury, G.C., 1992.
"Will Affirmative Action Policies Eliminate Negative Stereotypes?,"
3, Boston University - Department of Economics.
- Coate, Stephen & Loury, Glenn C, 1993. "Will Affirmative-Action Policies Eliminate Negative Stereotypes?," American Economic Review, American Economic Association, vol. 83(5), pages 1220-40, December.
- Manuel Bagues & Mauro Sylos Labini & Natalia Zinovyeva, 2008. "Differential Grading Standards and University Funding: Evidence from Italy," Working Papers 2008-07, FEDEA.
- Betts, Julian R, 1998. "The Impact of Educational Standards on the Level and Distribution of Earnings," American Economic Review, American Economic Association, vol. 88(1), pages 266-75, March.
- Mark Bagnoli & Ted Bergstrom, 2005.
"Log-concave probability and its applications,"
Springer, vol. 26(2), pages 445-469, 08.
- MacLeod, Bentley, 2009.
"Anti-Lemons: School Reputation and Educational Quality,"
Department of Economics, Working Paper Series
qt3rc708kd, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- W. Bentley MacLeod & Miguel Urquiola, 2009. "Anti-Lemons: School Reputation and Educational Quality," NBER Working Papers 15112, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:26461. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht)
If references are entirely missing, you can add them using this form.