Retaking in High Stakes Exams: Is Less More?

NBER Working Paper No. 21640

Issued in October 2015

NBER Program(s):Economics of Education, Industrial Organization



Placement, both in university and in the civil service, according to performance in competitive exams is the norm in much of the world. Repeat taking of such exams is common despite the private and social costs it imposes. We develop and estimate a structural model of exam retaking using data from Turkey's university placement exam. We find that limiting retaking, though individually harmful given the equilibrium, actually increases expected welfare across the board. This result comes from a general equilibrium effect: retakers crowd the market and impose negative spillovers on others by raising acceptance cutoffs.

Acknowledgments

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Document Object Identifier (DOI): 10.3386/w21640

Published: Kala Krishna & Sergey Lychagin & Veronica Frisancho, 2018. "RETAKING IN HIGH STAKES EXAMS: IS LESS MORE?," International Economic Review, vol 59(2), pages 449-477. citation courtesy of

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