The use of students’ within-school grade point average (GPA) ranking has emerged as a means to increase admission rates of both segregated minorities and high-performance individuals. Based on that idea, Chile's centralized university admission system introduced, in 2012, a “GPA-ranking score” variable. In contrast to other ranking-based criteria, the Chilean version ostensibly avoids classmate competition by basing scores on past cohorts’ GPAs. Also, the GPA-ranking is similar to an added bonus to the GPA score, and it does not replace the national admission exam. Such design incentivizes both academic effort and GPA inflation. In this paper, we analyze the effects of the Chilean reform on GPA and achievement. Our results, based on difference-in-differences and simulated instruments methods, suggest that: (i) GPA increased across the entire distribution of students; (ii) GPA increases were larger in schools where the new variable presented greater incentives; and (iii) GPA increases were unrelated to improvements in achievement. We interpret the results as evidence that the Chilean ranking variable caused GPA inflation rather than increased learning.
- College admissions
- Moral hazard