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- W3124457968 abstract "We develop a model of strategic grade determination by universities distinguished by their distributions of student academic abilities. Universities choose grading standards to maximize the total wages of graduates, taking into account how the grading standards affect firms' productivity assessment and job placement. We identify conditions under which better universities set lower grading standards, exploiting the fact that firms cannot distinguish between “good” and “bad”“A’'s. In contrast, a social planner sets stricter standards at better universities. We show how increases in skilled jobs drive grade inflation, and determine when grading standards fall faster at better schools. (JEL I21)" @default.
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- W3124457968 date "2012-12-02" @default.
- W3124457968 modified "2023-09-23" @default.
- W3124457968 title "UNIVERSITY COMPETITION, GRADING STANDARDS, AND GRADE INFLATION" @default.
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- W3124457968 doi "https://doi.org/10.1111/j.1465-7295.2012.00491.x" @default.
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