Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/113733
Authors: 
Schwerdt, Guido
Woessmann, Ludger
Year of Publication: 
2015
Series/Report no.: 
CESifo Working Paper 5404
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 percent when obtained on central exams but less than 2 percent when obtained on local exams. Choices of higher-education programs and of occupations do not appear major channels of this result.
Subjects: 
central exit exams
labor-market sorting
earnings
measurement error
difference-in-difference
Germany
JEL: 
I20
J24
J31
Document Type: 
Working Paper

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