Grade inflation and the signaling value of grades
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Grades are the fundamental currency of our educational system; they incentivize student performance and academic behavior, and signal quality of student academic achievement to parents, employers, postsecondary gatekeepers, and students themselves. Grade inflation compromises the value of grades and undermines their capacity to achieve the functions for which they are intended. I challenge the ‘increases in grade point average’ definition of grade inflation employed by critics and argue that grade inflation must be understood in terms of the signaling power of grades. Analyzing data from four nationally representative samples of high school students, I find that in the decades following 1972: (a) grades have risen at high schools and dropped at four-year colleges, in general, and selective four-year institutions, in particular; and (b) the signaling power of grades has attenuated little, if at all. I conclude that the concerns of critics who warn of rampant grade inflation are misplaced. Grades at secondary and postsecondary institutions are just as meaningful now as they were four decades ago.