Grade inflation is awful. Giving students higher grades than they earned rewards them with grades they don’t deserve and makes them think they know more than they do. Right? Maybe not.

Here is an argument that grade inflation maybe useful in some cases, helping students to persist in school and succeed in areas they otherwise might not have pursued.

This was written by Zach Bleemer, a postdoctoral fellow at Opportunity Insights at Harvard University and a research associate at the Center for Studies in Higher Education at the University of California at Berkeley. Next fall, he will join the Yale School of Management as an assistant professor of economics.

By Zachary Bleemer

Grades at American high schools and colleges are rising at a faster rate than students’ performance on standardized tests. This “grade inflation” has generally provoked scorn, including from The Washington Post’s editorial board, which argued in 2018 that “it is not fair to give grades that haven’t been earned, and the people who end up being cheated are the students themselves.”

A series of recent studies by several independent teams of economists, though, have advanced a surprising hypothesis: that in many circumstances, grade inflation may be providing important benefits to many of today’s students.

Everyone agrees that kids should learn more in school. Grade inflation may weaken some students’ incentive to study and could frustrate colleges’ ability to identify well-prepared applicants — but higher grades may also bolster some students’ confidence and encourage them into rigorous disciplines where they might succeed.

The distribution of grades is an educational policy choice, and we should evaluate grade inflation in the same way that we evaluate other educational policies: do higher grades improve or hinder the learning and longer-run outcomes of grade-inflated students?

Consider the choice of majoring in science and engineering (STEM) fields. STEM courses tend to award lower average grades than other fields, and female students are more likely than male students to switch their fields of study if they earn low grades in introductory courses.

As a result, inflating grades in STEM courses might increase the share of female students earning STEM degrees, narrowing the worrisome gender gap in those majors. Indeed, a recent study of the University of Kentucky presents evidence that equalizing grades in STEM and non-STEM courses would shrink the STEM gender gap by over 10 percent, though the scholars do not estimate changes in how much students learn.

Another study, conducted by researchers at Brigham Young University and Purdue University, investigates the increase in national college completion rates since the 1990s. After rejecting many possible explanations for this increase — like better-prepared students or improved student services — the authors argue that grade inflation appears to play an important role. Students don’t seem to be learning any more or less in their introductory courses, but higher grades may contribute to their increasing college persistence.

These studies argue that grade inflation may encourage students to stick with their education despite its challenges.

It may still be true that “the people who end up being cheated are the students themselves.” After all, grade inflation may make it more difficult for students to assess their own level of academic preparation and aptitude, which could lead students to persist along educational tracks that may not best match their talents. This line of argument assumes that students who earn low grades in certain classes may be better off focusing on something else, for their own good, no matter their personal preferences.

My colleague Aashish Mehta and I recently tested that hypothesis by studying a striking policy implemented by the University of California at Santa Cruz. At UCSC, students are only allowed to major in economics if they earn at least a 2.8 (B-/B) GPA in the major’s introductory courses. While students below the 2.8 threshold are allowed to appeal the department’s decision, most of them end up earning majors in other social sciences instead.

Professor Mehta and I focused on students with GPAs very close to the UCSC Economics Department’s 2.8 GPA threshold. Students just below that threshold were pushed toward studying something else while students just above the threshold were allowed into the economics major, even though the two groups of students had similarly low grades in economics. Which students were better off?

It turns out that pushing the lower-GPA students out of economics led them to other majors where they earned higher average grades, but they were no more or less likely to earn a college degree; nearly all of them would have been able to finish UCSC’s economics major within four years. However, the policy had a large impact on students’ employment prospects: economics majors tend to have higher earnings than majors in other fields, and being pushed out of economics decreased lower-GPA students’ early-career wages by almost a third.

In fact, we find evidence that the wage value of being an economics major would have been even higher for those low-GPA students than it was for the average UCSC economics major. Getting low grades in introductory economics courses appears to have been an indicator that those students had a lot to learn from being economics majors, as opposed to an indicator that they were unable to learn economics. If only the students who had preferred to study economics had been allowed into the major despite their low grades, they could have derived big long-run benefits from that education.

This suggests another important benefit of grade inflation: that it could help more students stick with their preferred majors — generally a wise choice economically (even in the humanities!) — rather than being discouraged by low grades or prohibited by policies like UCSC’s GPA restriction.

Education remains valuable for B and C students; it isn’t always true that relegating those students to different classes means that they learn more in school. Since the students who earn lower grades in college courses tend to be from more-disadvantaged backgrounds, and since low-GPA and restricted majors tend to be more lucrative, there is also an important equity component here: grade inflation could help to narrow equity gaps by encouraging disadvantaged students into challenging fields of study despite their lower introductory grades in those fields.

All of these studies focus on college grades, but the same arguments hold for high schools. Higher grades could mean less discouragement from challenging subjects and maybe even greater confidence and persistence to graduation. While inflated high school grades may make college admissions more challenging, grades remain highly predictive of college preparedness, and admissions offices can adjust to applicants’ higher average GPAs by adjusting their GPA expectations or focusing on class rank.

The College Board has motivated some concern that grade inflation is greater at affluent high schools, which could potentially limit college access for students from lower-income schools, but this doesn’t appear to be true among the high school graduates headed to selective universities.

In fact, there’s some evidence of the opposite effect: since top students at many affluent high schools have already neared the upper bound of possible high school grades, top students from less-affluent schools have been “catching up” through their own schools’ grade inflation, though it doesn’t appear that those students have been “catching up” in terms of standardized test scores.

We have a lot more to learn about the motivational and learning effects of higher or lower grades, and not all grade inflation is created equal: for example, a recent grade-deflation policy at Wellesley had the net effect of increasing enrollment in STEM fields, seen by many as a positive outcome.

But when it comes to the real educational outcomes of American students, the grade inflation we’ve seen in the past few decades may have caused more good than harm.