Grade inflation and school competition: an empirical analysis based on the Swedish upper secondary schools

This paper explores the connection between grade inflation and school competition by studying graduates from the Swedish upper secondary schools in 1997. The final grades are compared to the SweSAT national test scores. Single school municipalities are compared with multiple school municipalities in order to study if potential intra-municipal school competition leads to grade inflation. We also compare independent schools with public schools. It is found that intra-municipal school competition leads to modest levels of grade inflation. Foremost, non-native students fare better being graded in municipalities with potential competition than in single school environments. Independent schools appear to inflate grades heavily. A male student with average previous educational achievement improves his position in the grade distribution by approximately 15% if graded in an independent school.