A Setback Set Right? Unfortunate Timing of Family Distress and Educational Outcomes

In this paper I present causal evidence that a relatively mild event of family distress can have lasting negative consequences in a context with high-stakes standardized testing. I investigate how children's educational outcomes are a ected by experiencing a common form of family distress - the death of a grandparent - shortly before taking a test that co-determines secondary school track placement. I employ administrative registers from the Netherlands that allow me to obtain causal estimates by exploiting the quasi-random timing of death with respect to the track placement test. The ndings show that grandparental loss at an unfortunate time leads to reduced test performance, and consequently an increased likelihood of attending or graduating from the lowest track of secondary education. These negative e ects on secondary school outcomes are further aggravated by the subjective teacher recommendation, as children who lost a grandparent receive a lower track recommendation. The possibility to participate in a makeup test and switch tracks later-on mitigates part of the negative e ects, although it is not able to fully o set the initial setback. The ndings underline the importance of understanding the interaction between the educational setup and family distress for ensuring educational equality of opportunity.