When Would Educational Standards Help Improve Scholastic Achievement?
24 Pages Posted: 12 Jun 2000
Date Written: October 1999
I study the potential effects of setting mandatory standards in primary and secondary education on student performance. To that end, I present a model in which investment in education is indivisible. Thus, if demand exceeds supply at any level of education, allocation is carried out - at least in part - via test scores. The model highlights how the effectiveness of educational standards in altering student performance depends on the college and secondary school education premia, the stringency of standards, and the supply of college education - factors which together determine the competitiveness of college admissions. A relatively high college education premium raises the incentive to finish high school and apply to college, but the marginal benefit of meeting standards or the cost of non-compliance depend on the secondary education premium. Thus, the effect of raising educational standards on student performance may be relatively small when the secondary education premium is relatively low. Moreover, when the supply of higher education is relatively abundant so that college entrance is a non-competitive process, students' incentive to make their best effort diminishes, and in that case, the role of education premia - and therefore of standards - as incentives may be limited.
Keywords: tests, student performance, education premia, unskilled wage rate
JEL Classification: I21, I28
Suggested Citation: Suggested Citation