A few comments on Grade inflation

June 1, 2011 at 1:57 pm (Personal experiences, Price theory, Rochester)

One of the most unpleasant things I had to deal with while studying under the American system is grade inflation. I grew up studying for one of the most harshly curved exams in the world, in which usually less than 2% of students receive an A in each subject, and less than 7% receive a B (there is no +/-). The American system was obviously a drastic change for me. The first day I entered my American high school (for the senior year), I realized that I could receive an A with work that formerly only deserved an E. I was quite delighted for about twenty minutes before it dawned on me that the system is absolutely terrible, especially for students like me who only knew how to distinguish ourselves by our grades.

Steven Landsburg has an excellent article that says pretty much everything which needs to be said about grade inflation – why it exists and why it is horrible. Grades, he argues, are fundamentally a source of information to employers. With less distinction on the higher end of the curve, employers are not able to distinguish between the best and the slightly less great applicants. This makes it difficult to allocate work effectively in society and hence reduces productivity. He raises the example of a worker worth $40,000 and another worker worth $30,000 with a similar profile (let’s say they both get a 4.0 – the matter is more complicated but essentially the same once we introduce lower GPAs). Because the employer cannot distinguish between them, their average value drops from $35,000 to something like $32,000. While the lesser worker is quite content, the better worker ends up a lot worse.

As a student and as someone who has studied in an alternative system, there are two points I would like to add:

First, the focus is somewhat narrow. The biggest problem, I would argue, is probably not with the “demand” but with the “supply”. To be succinct, this is because students influence their own value as workers.  If employers cannot distinguish between the best and second-best students, the best students may choose to slack off (until they can barely, but still, get an A) and hence reduce their future productivity. Or, more optimistically, they may find other methods to set themselves apart besides studying for classes. These methods should also increase their future productivity (with the possible exception of socializing with professors), but are certainly not effectively as taking classes, or such methods of selection would have been adopted without grade inflation.*

My second point is somewhat of a counterargument. Grade inflation would be truly terrible if everyone was forced to take the same type of classes, a system that prevails in Europe. That, fortunately, is not the case in America. For many subjects, especially the most valuable ones, you tend to have a choice in the difficulty of the classes you take. For example, at Rochester there are four different sequences of calculus sorted by difficulty. In addition, you have the option of “overloading”, usually for free (it costs you extra tuition to do so in many countries). Finally, you can always take graduate level courses, an option that is simply unimaginable in other countries.

Such freedom is a great substitute for a rigorous grading curve. Americans who have not experienced the horror of an alternative system may underestimate its value; it was, for me, one of the major reasons I came to America instead of staying in Asia or Canada, where there is very little freedom of course selection at university (in subjects and in difficulty) and almost none at the secondary school level. While I excelled in my local Chinese school, I can honestly say I learnt very little that was useful, especially towards the last few years. In my last year spent in the American high school, I managed to take 10 Advanced Placement exams (the equivalent of 1.25 years of college) on top of applying to college, taking six SAT exams and my normal course schedule. There is truly a lot you can accomplish in the American system as long as you are willing to (the problem, of course, is that most students either lack the maturity or the incentives).

Still, this is definitely not an argument for grade inflation. The predominant system in America before the 1960s/hippie-revolution shows that it is entirely possible to have such freedom in course selection on top of a rigorous grading scale.

* This is not absolutely correct. Some methods of selection come at a lesser cost than others. It may be worthwhile to encourage students, for example, to take part in extracurricular activities even when it is not easy to set them apart from others. But employers generally don’t seem to think that students spend enough time on academics. One evidence is that letters of recommendation in this country almost exclusively deal with academic performance rather than extracurricular activity.


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