Central Exit Exams as a Governance Instrument in the School System: Labor-Market Effects, Transmission Channels and Effect Heterogeneity

Tasks

The introduction of central exams is a crucial element of output-oriented models of the education system that emphasize the importance of monitoring devices. Existing evidence documents a positive relationship between central exams and student achievement as measured by test scores. However, little is known about long-term labor-market effects of central exams. The main goal of the project was therefore to extend the existing knowledge about potential labor-market effects of central exams.

The first task of the project was to analyze the relationship between central exams and labor-market outcomes based on data from the German socio-economic panel (SOEP). In a second step, the project investigated whether grades obtained in central exams had different signaling value than grades obtained in local exams. Moreover, the project investigated possible heterogeneities in the effect of central exams on labor-market outcomes and on student learning.

In sum, the project aimed to deepen our understanding about central exams as a policy instrument in the education system to effectively guide policy in further extending the role of centralized exams in the German education system.  

Data and other sources

German Socio-Economic Panel Study (SOEP)
Graduate Panel of the Higher Education Information System (HIS)
Programme for International Student Assessment (PISA)

Results

The research project provides first evidence that central school exit exams have indeed long-term labor-market effects.

While the results confirm that the existence of central school exit exams is unrelated to the earnings of high-track (Abitur) students, we find that students from the lowest track (Hauptschule) have higher earnings if they received their high-school leaving certificate in a state with central exams. We also find that graduates from both the low-track and the high-track schools have lower rates of unemployment when their school exit exam was centrally administered. On average, central exit exams are associated with roughly 12 percent higher earnings and 4 percentage points lower unemployment probability for graduates from low-track high schools, as well as with 2.5 percentage points lower unemployment probability for graduates from high-track high schools.

Furthermore high school leaving grades obtained in central exams have a stronger association with earnings, which increases students' incentives to learn in German states with central exit exams. The results show that a grade improvement by one entire grade level translates into approximately 8 percent higher earnings when grades are obtained in central exam compared to a 3 percent increase in earnings when grades are obtained in local exams.

Generally, in most cases the effects can be shown for different subgroups of the population and in different contexts. An important interaction is the fact, that school autonomy reforms have stronger positive effects on student achievement when the school system has central exit exams at the same time. 

Publications

Piopiunik, Marc, Guido Schwerdt and Ludger Wößmann, "Zentrale Abschlussprüfungen als Steuerungsinstrument im Schulsystem: Arbeitsmarkteffekte und Wirkungsmechanismen", in: Bundesministerium für Bildung und Forschung (Hrsg.): Steuerung im Bildungssystem: Implementation und Wirkung neuer Steuerungsinstrumente im Schulwesen, Bildungsforschung 43, BMBF, Berlin, 2016, 68–83, Information

Woessmann, Ludger, Eric A. Hanushek and Susanne Link, "Does School Autonomy Make Sense Everywhere? Panel Estimates from PISA", Journal of Development Economics 104, 2013, 212–232, Information, Working paper version available as: NBER Working Paper 17591 (PDF)

Piopiunik, Marc, Guido Schwerdt and Ludger Woessmann, "Central School Exit Exams and Labor-Market Outcomes", European Journal of Political Economy 31 (9), 2013, 92–108, Working paper version available as: CESifo Working Paper 3940 (PDF)

Schwerdt, Guido and Ludger Woessmann, "Zentrale Abschlussprüfungen: Arbeitsmarkteffekte und Wirkungsmechanismen", schulmanagement 44 (4), 2013, 29–31

Piopiunik, Marc, Guido Schwerdt and Ludger Woessmann (2013), Zentrale Abschlussprüfungen, Signalwirkung von Abiturnoten und Arbeitsmarkterfolg in Deutschland, Manuskript.

Piopiunik, Marc, Guido Schwerdt and Ludger Woessmann (2013), Zentrale Abschlussprüfungen, Signalwirkung von Abiturnoten und Arbeitsmarkterfolg in Deutschland, Zeitschrift für Erziehungswissenschaft (01/2014), 2014, 35-60; Information

Ludger Wößmann und Guido Schwerdt, "The Information Value of Central School Exams", Economics of Education Review 56, 2017, 65–79, Information, Working paper version available as: CESifo Working Paper 5404 (PDF)

Luedemann, Elke, "Intended and Unintended Short-Run Effects of the Introduction of Central Exit Exams: Evidence from Germany", in: Elke Luedemann, Schooling and the Formation of Cognitive and Non-Cognitive Outcomes, ifo Beiträge zur Wirtschaftsforschung 39, ifo Institut, 2011