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Grade Inflation and Education Quality

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  • Boleslavsky, Raphael
  • Cotton, Christopher

Abstract

We consider a game in which schools compete to place graduates in two distinct ways: by investing in the quality of education, and by strategically designing grading policies. In equilibrium, schools issue grades that do not perfectly reveal graduate abilities. This leads evaluators to have less-accurate information when hiring or admitting graduates. However, compared to fully-revealing grading, strategic grading motivates greater investment in educating students, increasing average graduate ability. Allowing grade inflation and related grading strategies can increase the probability evaluators select high-ability graduates.

Suggested Citation

  • Boleslavsky, Raphael & Cotton, Christopher, 2012. "Grade Inflation and Education Quality," MPRA Paper 66119, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:66119
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    References listed on IDEAS

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    More about this item

    Keywords

    strategic grading; grade inflation; education quality; school competition; Bayesian persuasion;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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