Retaking in High-Stakes Exams: Is Less More?

Economics

Speaker:Sergey Lychagin, Central European University
Date: Thursday 11 December 2014
Time: 13.30-15.00
Location: Streatham Court B

Further details

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.