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The Impact of Test Score Labels on Human-Capital Investment Decisions
- Journal of Human Resources
- University of Wisconsin Press
- Volume 51, Number 2, Spring 2016
- pp. 357-388
- Article
- Additional Information
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Students receive abundant information about their educational performance, but how this information affects future educational-investment decisions is not well understood. Increasingly, results from state-mandated standardized tests are an important source of information. Students receive a score and a label that summarizes their performance on these tests. Using a regression-discontinuity design, we find persistent effects of earning a more positive label on the college-going decisions of urban, low-income students. These findings are important not only for understanding students’ educational-investment decisions and the consequences of state testing practices but also for researchers using the regression-discontinuity design.