The Effect of Grades on Student Performance: Evidence from a Quasi-Experiment

Grades are frequently understood as an output of the educational process. However, they may also be an input: receiving a midterm grade may affect student performance in the remainder of the semester. Utilizing a regression discontinuity design to isolate the causal impact of midterm grades on subsequent student performance in the same course, we find that low grades appear to incentivize students to improve their subsequent course performance. When analyzing how students accomplish these improvements, our results indicate that students do not focus on studying for final exams, presumably because this is a risky strategy of “saving” the final course grade after a low midterm grade. Instead, we find that students improve their final course grade by increasing their performance on low-stakes assessments, such as participation, reading quizzes, and in-class clicker exercises. Additional analysis reveals that this effect of midterm grades is particularly strong among men, and to a lesser degree among younger students as well as nonsocial science majors. Our findings have practical implications for instructors for how they can motivate students in the second half of the semester.