The Impact of Grading Standards on Student Achievement, Educational Attainment, and Entry-Level Earnings

Julian R. Betts, Jeff Grogger

NBER Working Paper No. 7875
Issued in September 2000
NBER Program(s):   CH   LS

Despite recent theoretical work and proposals from educational reformers, there is little empirical work on the effects of higher grading standards. In this paper we use data from the High School and Beyond survey to estimate the effects of grading standards on student achievement, educational attainment, and entry level earnings. We consider not only how grading standards affect average outcomes but also how they affect the distribution of educational gains by skill level and race/ethnicity. We find that higher standards raise test scores throughout the distribution of achievement, but that the increase is greatest toward the top of the test score distribution. Higher standards have no positive effect on educational attainment, however, and indeed have negative effects on high school graduation among blacks and Hispanics. We suggest a relative performance hypothesis to explain how higher standards may reduce educational attainment even as they increase educational achievement.

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Document Object Identifier (DOI): 10.3386/w7875

Published: Betts, Julian R. & Grogger, Jeff, 2003. "The impact of grading standards on student achievement, educational attainment, and entry-level earnings," Economics of Education Review, Elsevier, vol. 22(4), pages 343-352, August. citation courtesy of

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