Association for Public Policy Analysis & Management

Amid concerns over low education standards, watered-down curricula, and consequently skills not rewarded by colleges and employers, many states require students to pass high school (HS) exit exams to graduate. These exams may help raise student productivity, better preparing them for college and the workforce. Exit exams, however, may come at the expense of increasing inequality in the education system if groups of students are disproportionately less likely to pass. Perhaps the most dire unintended consequence of failing an exam is dropping out of school. Compared to HS graduates, dropouts and GED recipients have poorer earnings, hours of work, employment, job tenure, health, and crime rates. Therefore, high dropout rates present an educational and social policy concern. This study explores the consequences of failing an exit exam for English language learners (ELLs), who have the highest dropout rate of any demographic group and are one of the fastest growing student populations. I investigate the effects of failing an exit exam and present the first evidence on the mechanisms by which exit exams may influence ELLs. In particular, I address three key questions. First, does failing an exit exam increase ELLs likelihood of dropping out of HS? Second, do exams discourage (encourage) those who failed (passed)? Lastly, is there a long-term effect of failing an exam on the probability of college enrollment?

ELLs make up roughly a tenth of all public school students and about 15% of students in urban schools. New York City (NYC), the setting for this study, has the second largest number ELLs in public schools, after Los Angeles. The 4-year and 5-year HS dropout rates for ELLs in 2015 were 22% and 33%, respectively, about 15 to 28 percentage points higher than the rate for students who are White, Black, Hispanic, Asian, economically-disadvantaged, or have a disability. An important takeaway from the exit exam literature is that exams can create both positive and negative incentives for students to either work harder and perform better or get discouraged and drop out. The perceived cost of (re)taking an exam may be larger for ELLs, who are more likely to attend schools with fewer resources and could face barriers related to language or knowledge about re-take opportunities.

I use student-level administrative longitudinal data on all NYC public school students from the NYC Department of Education matched with postsecondary data from the National Student Clearinghouse (2005-2015). I exploit a sharp regression discontinuity design to estimate the impact of failing an exam on HS dropout and college enrollment. Identification of causal effects is achieved by comparing students who are similar but on different sides of a predetermined test score cutoff. Additionally, I use a policy change that effectively raised exam standards in New York in 2008 to disentangle potential effects into encouraging versus discouraging factors. A number of states are now rethinking their exit exam standards. This study will provide timely information for policymakers to better assess the potential costs and benefits associated with these exams.