This paper shows a somehow counterintuitive result: an increase in the exam difficulty may reduce the average quality (productivity) of selected individuals. Since the exam does not verify all skills, when its standard rises, candidates with relatively low skills emphasized in the test and high...

The recent literature on externalities of schooling in the U.S. is rather mixed: positive external effects of average education are hardly found at all, while often positive externalities from the share of college graduates are identified. This paper proposes a simple model to explain this fact...

Occupational credentials provide an additional-and, at times, alternative-path other than traditional academic degrees for individuals to increase productivity and demonstrate their abilities and qualifications to employers. In the United States, these credentials typically take the form of...

The paper considers theoretical and empirical evidence on the impact of standards-based school reform. Our theoretical synthesis distinguishes between sorting and incentive effects of high standards, and spells out the potential tradeoffs and complementarities between enhancing efficiency and...