Abstract
This paper uses detailed register information on students in lower secondary school in Norway to study the importance of the second moment of individual grade distribution: grade variance. Students receive discrete-value grades from 1 to 6 in the same 13 subjects, and the grade point average (GPA) is used to determine entrance into upper secondary school. This leads to a limited number of possible GPA values and the within-GPA-value variation in grades is used to investigate the association between grade variance and educational attainment. Grade variance is found to be negatively associated with educational attainment across the grade distribution and for both genders. US data confirm this finding. Results suggests that being a generalist with similar skills across subjects predicts educational attainment and that educational institutions may benefit from considering more than just grade point average when making admission decisions.
Highlights
Cognitive skills are an important predictor for future outcomes for the individual, including education and labor market outcomes (Heckman, 1995; Herrnstein & Murray, 2010; Murnane, Willett, & Levy, 1995), and aggregate measures of cognitive skills are important for economic growth and development (Hanushek & Kimko, 2000; Hanushek & Woessmann, 2008)
This paper is the first to investigate the importance of the second moment of individual grade distribution: grade variance
The results show that for a given grade point average, students with higher variance complete fewer years of education than students with low grade variance
Summary
Cognitive skills are an important predictor for future outcomes for the individual, including education and labor market outcomes (Heckman, 1995; Herrnstein & Murray, 2010; Murnane, Willett, & Levy, 1995), and aggregate measures of cognitive skills are important for economic growth and development (Hanushek & Kimko, 2000; Hanushek & Woessmann, 2008). They study the impact of vocational versus general education and find that individuals with vocational education have an early labormarket advantage due, for instance, to their higher employability, these gains are often offset by reduced adaptability later in life Another reason why we might observe differences in grade variance, is that students have different cognitive and non-cognitive skills that are important across subjects. If higher cognitive or non-cognitive skills are associated with lower grade variance, we would expect a negative association between grade variance and educational attainment Another potential mechanism is related to the big fish in a small pond effect (Marsh, 1987), where students wrongly believe they have high absolute ability when their ability is high relative to their classmates (high rank), and invest more in human capital Is there an association between grade variance and educational attainment, and if so, in what direction and how large? And do further analyses rule out or confirm potential mechanisms?
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