Does grade inflation cost students $213,872 in lifetime earnings?

By Jeffrey T. Denning, Rachel L. Nesbit, Nolan G. Pope & Merrill Warnick.

"Average grades continue to rise in the United States, raising the question of how grade inflation impacts students. We provide comprehensive evidence on how teacher grading practices affect students' long-run success. Using administrative high school data from Los Angeles and from Maryland that is linked to postsecondary and earnings records, we develop and validate two teacher-level measures of grade inflation: one measuring average grade inflation and another measuring a teacher's propensity to give a passing grade. These measures of grade inflation are distinct from teacher value-added, with grade inflating teachers having moderately lower cognitive value-added and slightly higher noncognitive value-added. These two measures also differentially impact students' long-term outcomes. Being assigned a higher average grade inflating teacher reduces a student's future test scores, the likelihood of graduating from high school, college enrollment, and ultimately earnings. In contrast, passing grade inflation reduces the likelihood of being held back and increases high school graduation, with limited long-run effects. The cumulative impact is economically significant: a teacher with one standard deviation higher average grade inflation reduces the present discounted value of lifetime earnings of their students by $213,872 per year."

This reminds me of another study. See Does Professor Quality Matter? Evidence from Random Assignment of Students to Professors by Scott E. Carrell & James E. West. It was published in Journal of Political Economy in 2010. 

 

One thing I remember about this study is that more experienced calculus teachers at the Air Force academy gave out lower grades and got lower student evaluations in Calculus I than the less experienced teachers. But when the students who had the tougher teachers took Calculus II, they did better than the students who had the easier teachers who got better evaluations.