The Long Run Human Capital and Economic Consequences of High-Stakes Examinations

38 Pages Posted: 3 Nov 2014

See all articles by Victor Lavy

Victor Lavy

University of Warwick - Department of Economics; Hebrew University of Jerusalem - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Avraham Ebenstein

Hebrew University of Jerusalem - Department of Economics

Sefi Roth

University of London - Royal Holloway College

Multiple version iconThere are 2 versions of this paper

Date Written: October 2014

Abstract

Cognitive performance during high-stakes exams can be affected by random disturbances that, even if transitory, may have permanent consequences for long-term schooling attainment and labor market outcomes. We evaluate this hypothesis among Israeli high school students who took a series of high stakes matriculation exams between 2000 and 2002. As a source of random (transitory) shocks to high- stakes matriculation test scores, we use exposure to ambient air pollution during the day of the exam. First, we document a significant and negative relationship between average PM2.5 exposure during exams and student composite scores, post-secondary educational attainment, and earnings during adulthood. Second, using PM2.5 as an instrument, we estimate a large economic return to each point on the exam and each additional year of post-secondary education. Third, we examine the return to exam scores and schooling across sub-populations, and find the largest effects among boys, better students, and children from higher socio-economic backgrounds. The results suggest that random disturbances during high-stakes examinations can have long-term consequences for schooling and labor market outcomes, while also highlighting the drawbacks of using high-stakes examinations in university admissions.

Suggested Citation

Lavy, Victor and Ebenstein, Avraham and Roth, Sefi, The Long Run Human Capital and Economic Consequences of High-Stakes Examinations (October 2014). NBER Working Paper No. w20647. Available at SSRN: https://ssrn.com/abstract=2518737

Victor Lavy (Contact Author)

University of Warwick - Department of Economics ( email )

Coventry CV4 7AL
United Kingdom

Hebrew University of Jerusalem - Department of Economics ( email )

Mount Scopus
Jerusalem, 91905
Israel
+972 2 588 3245 (Phone)
+972 2 581 6071 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Avraham Ebenstein

Hebrew University of Jerusalem - Department of Economics ( email )

Israel

Sefi Roth

University of London - Royal Holloway College ( email )

Senate House
Malet Street
London, TW20 0EX
United Kingdom

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