New study: Grade-inflating teachers hurt students’ prospects and earnings
Grade inflation isn’t just a problem for colleges or employers fooled into thinking they’re getting an exceptional student when they’re getting an entirely average one instead.
It’s a problem for the students themselves, according to a recent paper, “Easy A’s, Less Pay: The Long-Term Effects of Grade Inflation,” co-authored by University of Texas at Austin economist Jeffrey Denning.
Grade-inflating high school teachers have a negative impact on students’ future test scores, student enrollment in post-secondary education, graduation from associate’s degree programs, odds of employment, and even future earnings.
In sum, the study suggests, students learn less and earn less when they have less incentive to actually study in order to get top grades. They get an ego boost for a day and a nice grade point average but don’t fare as well in either college or the real world.
And they end up with less money.
The study analyzed two different types of grade inflation: “mean grade inflation,” which measures how much assigned grades are inflated on average, and “passing grade inflation,” which measures how likely a teacher is to give a student a passing grade instead of an F.
“A teacher with one standard deviation higher mean grade inflation reduces the present discounted value of lifetime earning of their students (as a whole) by $213,872 per year of teaching,” according to the study.
Mean grade inflation “reduces earnings by about $56 to $145 a year (for individual students) from one through six years after expected high school graduation,” the study found.
Impacts of so-called “passing grade inflation” are different. That phenomenon, the study found, can decrease the likelihood of being held back and increases the probability of graduating from high school and going on to post-secondary education.
“However, from this evidence alone, it is not clear whether these higher rates of high school completion brought about by passing grade inflation are beneficial to students in the longer term,” according to the study.
There are positive earnings effects as well from passing grade inflation, but they are only statistically significant for one to three years after high school graduation.
Grade inflation is rampant.
The average GPA for undergraduate students at the University of Wisconsin-Madison increased to 3.48 in the recently completed fall semester — up from 3.28 just 10 years ago and close to the 3.5 midpoint between an A and B average, the Badger Institute recently reported.
There is a similar problem nationwide at the high school level, where grades increased almost half a GPA point between the 1980s and 2020, according to National Center for Education Statistics data.
The study that Denning co-authored analyzed the grades of hundreds of thousands of students in the Los Angeles Unified School District between 2004 and 2013 and students in public high schools in Maryland from 2013 to 2024. In the Los Angeles district, the mean GPA increased from 2.25 to 2.45, and the increase in Maryland was “remarkably similar,” according to the study.
Standardized test scores did not increase at the same rate, suggesting a shift toward lower grading standards.
The paper did not study the impact of grade inflation at other levels of schooling.
“However, many of the mechanisms highlighted in our paper likely still apply: mean grade inflation changes the incentives for learning at all levels, and passing grade inflation changes the fraction of students subject to the policy effects of course failure at all levels,” according to the authors.
The researchers noted that changes in grading policies “are a potential low-cost strategy that could be implemented by teachers, schools, and school districts to improve teacher quality and students’ long-term outcomes.” But they did not suggest specific remedies.
One solution floated at Harvard University recently, imposing a 20 percent cap on A’s, was criticized because it might dissuade students from taking difficult courses with smarter classmates.
Recording the median grade for every course on transcripts, on the other hand, could “reduce the pressure students currently feel to take easily graded courses, since the benefits of doing so would be less,” stated a Harvard report on grade inflation.
Some Canadian universities, including the University of Toronto, already include class GPA averages for each course on transcripts right next to the grade received by the individual — making it immediately apparent how an individual performed in comparison to peers in the exact same class. That is “at least something to which they (UW-Madison officials) should give serious thought,” Madison Professor Emeritus Donald Downs told the Badger Institute. “Absolutely.”
Mike Nichols is the president of the Badger Institute.
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