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.
| Item Type: | Journal article |
|---|---|
| Faculties: | Economics Economics > Chairs > CESifo-Professorship for Economics of Education and Innovation |
| Subjects: | 300 Social sciences > 330 Economics |
| ISSN: | 0272-7757 |
| Language: | English |
| Item ID: | 55049 |
| Date Deposited: | 14. Jun 2018, 09:57 |
| Last Modified: | 04. Nov 2020, 13:35 |
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