Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/68254 
Year of Publication: 
2012
Series/Report no.: 
WZB Discussion Paper No. SP II 2012-111
Publisher: 
Wissenschaftszentrum Berlin für Sozialforschung (WZB), Berlin
Abstract: 
Previous work on the relation between school inputs and students' educational attainment typically fails to account for the fact that schools can adjust their grading structure, even though such actions are likely to affect students' incentives. Our theoretical model shows that, depending on schools' and students' reactions to resource changes, the overall effect of spending on education outcomes is ambiguous. Schools, however, adjust their grading structure following resource shifts, such that grade inflation is likely to accompany resource-driven policies. Exploiting a quasi-experimental policy intervention in the Netherlands (where the grading system relies on both standardized central and schoollevel exams), we find that additional resources benefit educational attainment only when they are substantial, but induce grade inflation otherwise.
Subjects: 
public expenditures
grade inflation
educational attainment
standardized central exam
JEL: 
I20
I28
H52
Document Type: 
Working Paper

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