Knowing who you actually are: the effect of feedback on short- and longer-term outcomes

We study the effect of disclosing relative performance information (feedback) about students’ performance in high school on subsequent university enrollment and on expected future earnings. We exploit a large-scale natural experiment in which students in some cohorts receive information about their relative performance in some subjects (and not others) within their schools and across the nation. Using unique data, we find an asymmetric response to feedback: High-achieving students improve their final-year performance by 0.15 of a standard deviation, whereas the final-year performance of low-achieving students drops by 0.3 of a standard deviation. Results indicate that females are more discouraged by feedback in all parts of the ability distribution. We also document the longer-term effects of feedback: High-achieving students reduce their repetition rate for the national exams, enroll in university departments that are more selective by 0.11 of a standard deviation, and increase their expected annual earnings by 0.10 of a standard deviation. In contrast, results for low-achieving students are negative. A likely driver of our results is students’ potential uncertainty about their own relative ability.