Putting Grades in Context

Abstract

Concerns over grade inflation and the profusion of high grades have led institutions of higher education in the United States to adopt various grading reforms. An element common to several prominent reforms is providing information on the distribution of grades in different courses. The main aims of such “grades in context” policies are to make grades more informative to transcript readers and to curb grade inflation. We provide a simple model to demonstrate that such policies can have complex effects on atterns of enrollment and student ability distributions. These effects may in turn lower the informativeness of some transcripts, increase the average grade, and lower welfare

Keywords: grades in context, grade inflation, information, course selection, higher education

JEL Classification: I21