Retaking in High Stakes Exams: Is Less More?

48 Pages Posted: 19 Oct 2015

See all articles by Kala Krishna

Kala Krishna

Pennsylvania State University - Department of Economics; National Bureau of Economic Research (NBER)

Sergey Lychagin

Central European University (CEU)

Verónica Frisancho

Inter-American Development Bank (IDB)

Multiple version iconThere are 3 versions of this paper

Date Written: October 2015

Abstract

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.

Suggested Citation

Krishna, Kala and Lychagin, Sergey and Frisancho, Veronica, Retaking in High Stakes Exams: Is Less More? (October 2015). NBER Working Paper No. w21640, Available at SSRN: https://ssrn.com/abstract=2675913

Kala Krishna (Contact Author)

Pennsylvania State University - Department of Economics ( email )

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Sergey Lychagin

Central European University (CEU) ( email )

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Veronica Frisancho

Inter-American Development Bank (IDB) ( email )

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Washington, DC 20577
United States

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