Essays in Economics of Education, Aging and Trade Unions

A higher grade in high school exit exams leads more often to a university education and increases income. According to a study by Aalto University and The Labour Institute for Economic Research, the differences between equally skilled and talented people caused by grades increase over time

Doctoral student Artturi Björk at Aalto University's Department of Economics defends his thesis on the effects of high school exit exam grades on further education and career. The research found that at the age of 35, the effect of a higher grade on earnings is 0-1.5% and the effect doubles by the age of 45. Higher educational attainment explains about 60 percent of the effect. The effect of the grades is significantly smaller in Finland than previously observed in other countries.

"Using a finer-grained scale in exit exam certificates would reduce inequality related to grade cutoffs. The importance of grades increases as more students get into higher education based on high school exit exams. A high grade can become so valuable that retaking exit exams increases. If this happens, part of the benefit of admitting students based on exam grades, faster transition from high school to higher education, is lost," Björk ponders.

Students with good grades in high school exit exams are more educated and successful in the labor market than other students. This may be due to students with good grades being different in some way from those with lower grades (e.g. skills or motivation) or because good grades cause the differences. For example, by grades being used to determine who to admit to higher education.

The study compares those who got higher grades in the English and Swedish matriculation exams between 1982 and 2013 to those who barely fell below the grade cutoff. This research design made it possible to isolate the effect of exit exam grades from other factors.

In addition to the effects of high school grades, the thesis that Artturi Björk is defending includes research on the connection between aging and economic inequality and on the effect of wage negotiations between a trade union and employers on investment. The research on high school grades is in collaboration with Hannu Karhunen, the research supervisor at The Labour Institute for Economic Research.

Contact Artturi Björk

Email: artturi.bjork(at)gmail.com

Website: https://sites.google.com/view/artturibjork/

Twitter: https://twitter.com/artturib