High-Stakes Grades and Student Behavior

High-stakes exams provide students with incentives to perform well. This paper uses a reform-induced recoding of grades from completed exams, which caused variation in high school students’ grade point average (GPA), to identify students’ behavioral responses to changes in high-stakes grades. The results show that students who were downgraded by the recoding performed better on subsequent assessments and worked less for pay during high school. Students with downgraded grades were also somewhat more likely to enroll in college. As the recoding did not convey information on academic performance, these results emphasize that changes in incentives are important in understanding students’ responses to high-stakes grades. There is no evidence that the recoding algorithm predicts outcomes for nonaffected cohorts.