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The Impact of Grade Inflation on Higher Education Enrolment and Earnings

Author

Listed:
  • Nordin, Martin

    (Swedish Institute for Food and Agricultural Economics, Lund University, Sweden)

  • Heckley , Gawain

    (Health Economics Unit, Department of Clinical Sciences, Lund University, Sweden)

  • Gerdtham , Ulf-G.

    (Department of Economics, Lund University)

Abstract

Although grade inflation is unfair and may imply inefficient allocation of human resources, current knowledge of grade inflation effects on individual outcomes is scarce. One explanation is probably the challenge of measuring and estimating causal grade inflation effects. This study examines the consequences of grade inflation at the upper secondary education level on enrolment in higher education and earnings for Sweden. Rigorous diagnostic testing supports our empirical approach. Grade inflation at the school level affects earnings mainly through choice of university and the chosen field of education, rather than through enrolment per se, because attending universities of higher quality and pursuing high-paying fields of education have a substantial impact on earnings. On the other hand, high-skilled students attending upper secondary schools without grade inflation and, unexpectedly, low-skilled women attending "lenient" schools are harmed by this. This causes extensive unfairness and, plausibly, detrimental welfare effects.

Suggested Citation

  • Nordin, Martin & Heckley , Gawain & Gerdtham , Ulf-G., 2019. "The Impact of Grade Inflation on Higher Education Enrolment and Earnings," Working Papers 2019:1, Lund University, Department of Economics.
    • Handle: RePEc:hhs:lunewp:2019_001
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    2. Alam, Gazi Mahabubul & Parvin, Morsheda, 2021. "Can online higher education be an active agent for change? —comparison of academic success and job-readiness before and during COVID-19," Technological Forecasting and Social Change, Elsevier, vol. 172(C).
    3. Silva, Pedro Luís & DesJardins, Stephen L. & Biscaia, Ricardo & Sá, Carla & Teixeira, Pedro N., 2023. "Public and Private School Grade Inflations Patterns in Secondary Education," IZA Discussion Papers 16016, Institute of Labor Economics (IZA).
    4. Ferman, Bruno & Fontes, Luiz Felipe, 2020. "Discriminating Behavior: Evidence from teachers’ grading bias," MPRA Paper 100400, University Library of Munich, Germany.
    5. Edmark, Karin & Persson, Lovisa, 2021. "The impact of attending an independent upper secondary school: Evidence from Sweden using school ranking data," Economics of Education Review, Elsevier, vol. 84(C).
    6. Nordin, Martin & Heckley, Gawain & Gerdtham, Ulf, 2019. "The impact of grade inflation on higher education enrolment and earnings," Economics of Education Review, Elsevier, vol. 73(C).
    7. Anna Linder & Martin Nordin & Ulf‐G. Gerdtham & Gawain Heckley, 2023. "Grading bias and young adult mental health," Health Economics, John Wiley & Sons, Ltd., vol. 32(3), pages 675-696, March.
    8. Ferman, Bruno & Fontes, Luiz Felipe, 2022. "Assessing knowledge or classroom behavior? Evidence of teachers’ grading bias," Journal of Public Economics, Elsevier, vol. 216(C).

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    More about this item

    Keywords

    grade inflation; upper-secondary education; higher education; earnings;
    All these keywords.

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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