Making the Grade (But Not Disclosing It): How Withholding Grades Affects Student Behavior and Employment

58 Pages Posted: 5 May 2022

See all articles by Eric Floyd

Eric Floyd

University of California San Diego

Sorabh Tomar

Southern Methodist University (SMU) - Accounting Department

Daniel Lee

University of Delaware - Alfred Lerner College of Business and Economics

Date Written: April 30, 2022

Abstract

We study the effects of grade non-disclosure (GND) policies implemented within MBA programs at highly ranked business schools. GND precludes students from revealing their grades and grade point averages (GPAs) to employers. In the labor market, we find that GND weakens the positive relation between GPA and employer desirability. During the MBA program, we find that GND reduces students' academic effort within courses by approximately 4.9%, relative to comparable students not subject to the policy. Consistent with our model, in which abilities are potentially correlated and students can substitute effort towards other activities in order to signal GPA-related ability, students participate in more extracurricular activities and enroll in more difficult courses under GND. Finally, we show that students' tenure with their first employers after graduation decreases following GND.

JEL Classification: D70, D82, J24, M51

Suggested Citation

Floyd, Eric and Tomar, Sorabh and Lee, Daniel, Making the Grade (But Not Disclosing It): How Withholding Grades Affects Student Behavior and Employment (April 30, 2022). SMU Cox School of Business Research Paper No. 22-13, Available at SSRN: https://ssrn.com/abstract=4097763 or http://dx.doi.org/10.2139/ssrn.4097763

Eric Floyd (Contact Author)

University of California San Diego ( email )

CA
United States

Sorabh Tomar

Southern Methodist University (SMU) - Accounting Department ( email )

United States

Daniel Lee

University of Delaware - Alfred Lerner College of Business and Economics ( email )

419 Purnell Hall
Newark, DE 19716
United States

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