PT - JOURNAL ARTICLE AU - Hvidman, Ulrik AU - Sievertsen, Hans Henrik TI - High-Stakes Grades and Student Behavior AID - 10.3368/jhr.56.3.0718-9620R2 DP - 2019 Sep 16 TA - Journal of Human Resources PG - 0718-9620R2 4099 - http://jhr.uwpress.org/content/early/2019/09/10/jhr.56.3.0718-9620R2.short 4100 - http://jhr.uwpress.org/content/early/2019/09/10/jhr.56.3.0718-9620R2.full AB - High-stakes exams carry important consequences for the prospects of reaching university. This study examines whether the incentives associated with exam grades affect educational investments. Exploiting a reform-induced recoding of high school students’ grade point average, we identify the effect of high-stakes grades on student behavior. The results show that students who were downgraded by the recoding performed better on subsequent assessments. The increase in academic performance in high school translated into an increased likelihood of university enrollment. As the recoding did not convey information about actual performance, these results emphasize that incentives are important in understanding students’ educational investments.