Short- and long-run effects of early grades

• Main Author: FACCHINELLO, Luca
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2019
• Subjects: Grades; Ability; Uncertainty; Learning; Sequential Choice; School Choice; Social Background; Educational Attainment; Dropout; Difference in Differences; Educational Assessment, Evaluation, and Research; Education Economics
• Online Access: https://ink.library.smu.edu.sg/soe_research_all/6; https://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=1005&context=soe_research_all
• Institution: Singapore Management University

Does early grading affect educational choices? To answer the question, I exploit the staggeredimplementation of a reform which postponed grade assignment in Swedish compulsoryschool. I identify short- and long-term effects of early grading, for students with differentacademic ability and socioeconomic status (SES). When graded early on, high-ability students(especially if high-SES) perform better, and are more likely to choose academic coursesduring compulsory school. Low-ability students react in the opposite way, in particular iflow-SES. While high school attainment increases for high-ability low-SES students, collegeattainment decreases for low-ability low-SES students. None of these effects carry over tothe labor market. This suggests that early grades improve the match between early educationchoices and academic ability, reduce over-investment in education, but exacerbateeducational inequality. I find no evidence of demotivating effects for low-ability students,a plausible mechanism through which grades could affect education choices, and the mainmotivation behind the grading reform. Theoretically, I show that short-term effects are inline with the predictions of a model where students learn about their ability from SES andgrades.