Abstract
Cognitive performance during high- stakes exams can be affected by random disturbances that, even if transitory, may have permanent consequences. We evaluate this hypothesis among Israeli students who took a series of matriculation exams between 2000 and 2002. Exploiting variation across the same student taking multiple exams, we find that transitory PM2.5 exposure is associated with a significant decline in student performance. We then examine these students in 2010 and find that PM2.5 exposure during exams is negatively associated with postsecondary educational attainment and earnings. The results highlight how reliance on noisy signals of student quality can lead to allocative inefficiency.
| Original language | English |
|---|---|
| Pages (from-to) | 36-65 |
| Number of pages | 30 |
| Journal | American Economic Journal: Applied Economics |
| Volume | 8 |
| Issue number | 4 |
| DOIs | |
| State | Published - 2016 |
Bibliographical note
Funding Information:We thank Israel's National Insurance Institute (NII) for allowing restricted access to data in the NII protected research lab. Research of the second author is supported by European Research Council (ERC) Advance Grant No. 323439. The authors declare that they have no relevant or material financial interests that relate to the research described in the paper.
