How Performance Information Affects Human-Capital Investment Decisions: The Impact of Test-Score Labels on Educational Outcomes

50 Pages Posted: 25 Jun 2011

See all articles by John P. Papay

John P. Papay

Brown University

Richard J. Murnane

Harvard University - Harvard Graduate School of Education; National Bureau of Economic Research (NBER)

John B. Willett

Harvard University - Harvard Graduate School of Education

Date Written: June 2011

Abstract

Students receive abundant information about their educational performance, but how this information affects future educational-investment decisions is not well understood. Increasingly common sources of information are state-mandated standardized tests. On these tests, students receive a score and a label that summarizes their performance. Using a regression-discontinuity design, we find persistent effects of earning a more positive label on the college-going decisions of urban, low-income students. Consistent with a Bayesian-updating model, these effects are concentrated among students with weaker priors, specifically those who report before taking the test that they do not plan to attend a four-year college.

Suggested Citation

Papay, John P. and Murnane, Richard J. and Willett, John B., How Performance Information Affects Human-Capital Investment Decisions: The Impact of Test-Score Labels on Educational Outcomes (June 2011). NBER Working Paper No. w17120, Available at SSRN: https://ssrn.com/abstract=1871563

John P. Papay (Contact Author)

Brown University ( email )

Box 1860
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United States

Richard J. Murnane

Harvard University - Harvard Graduate School of Education ( email )

6 Appian Way
Gutman Library 409
Cambridge, MA 02138
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617-496-4820 (Phone)
617-496-3095 (Fax)

National Bureau of Economic Research (NBER) ( email )

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Cambridge, MA 02138
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617-496-4820 (Phone)
617-496-3095 (Fax)

John B. Willett

Harvard University - Harvard Graduate School of Education ( email )

6 Appian Way
Cambridge, MA 02138
United States
617-495-3401 (Phone)

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