Putting grades in context

Concerns over grade inflation have led institutions of higher education in the United States to adopt various grading reforms. An element common to several prominent reforms is providing information on the distribution of grades in different courses. The main aim of such “grades in context” policies is to make grades more informative to transcript readers. An additional goal is to curb grade inflation. We provide a simple model to investigate the effect of such policies. Our analysis demonstrates that the provision of aggregate grade information could have unintended consequences. Specifically, we show that such policies could increase enrollment into leniently graded courses and contribute to grade inflation. Moreover, such “grades in context ” policies can have complex effects on the distribution of student abilities across courses, which may lower, rather than increase, the quality of information obtained by transcript readers.
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