Theoretical work shows that grading on a curve, i.e., teachers assessing students relativeto their classmates, can negatively affect students learning effort. However, little isknown about its empirical incidence. To overcome bias from non-random sorting andomitted variables like teachers grading standards, we exploit within-student acrosssubjectvariation observing both teacher-assigned grades and test scores of German4th-graders in reading and math. We find that having classmates with one standarddeviation higher test scores lowers a students grade by about 10 percent of a standarddeviation. Importantly, only female teachers grade on a curve and there is no associationbetween students learning effort and relative grading.
Teacher grading grading on a curve learning incentives