What happens when employers would like to screen their employees but only observe a subset of output? We specify a model in which heterogeneous employees respond by producing more of the observed output at the expense of the unobserved output. Though this substitution distorts output in the...

This paper uses a principal-agent model to investigate how public school managers react to government incentives based on previous school performance. Using data from the Brazilian Student Evaluation Exam (Prova Brasil -- PB) and the School Census, we estimate a managerial effort function by...

Does a ban on grade inflation bring about better information transmission? This paper studies grade inflation in a framework in which a sender (the professor) sends a signal (GPA's) about the students' knowledge to receivers (employers in the job market). If students' ability increases annually,...

This paper uses a principal-agent model to investigate how public school managers react to government incentives based on previous school performance. Using data from the Brazilian Student Evaluation Exam (Prova Brasil - PB) and the School Census, we estimate a managerial effort function by...

What happens when employers would like to screen their employees but only observe a subset of output? We specify a model in which heterogeneous employees respond by producing more of the observed output at the expense of the unobserved output. Though this substitution distorts output in the...