A Moral Hazard Model of High-Stakes Assessments: A Quasi-Experiment on Credentialing Skills to Incentivize Students

• In Event: Equitable Education Policies for Immigrant, Refugee, and English Learner Students

Abstract

In 2011, the California legislature passed the State Seal of Biliteracy (SSB), becoming the first state-level policy to credential fluency and literacy in multiple languages as a productive skillset for advancing economic growth. Furthermore, advances in information and communication technologies have increased globalization and the resulting demand for a multilingual labor force.

This paper provides policymakers with an economic toolkit for designing policies to alleviate the moral hazard of unreliable standardized assessments and create equitable academic outcomes for English Learners. This paper utilizes a quasi-experiment to analyze state policy for improving the efficacy of academic credentials as educational incentives and informative signals of the comparative advantage endowed by marginalized student populations with the growth of transnational economic activity.

Author

• Arun Kolar, University of Wisconsin - Madison