Improving the signal quality of grades

Abstract We investigate how improving the signal quality of grades could enhance the matching of students to selective opportunities that are awarded early in academic programs. To do so, we develop methods to measure the signal quality of grades and to estimate the impact of changes to university policies on the identification of exceptional students for these opportunities. We focus on law schools, a setting where students are awarded important academic and professional opportunities after just one year of a three-year program. Using transcript data from a top law school over a 40-year period, we document large gains in identifying exceptional students if changes were made to certain personnel, course, and grading policies. Our findings provide motivation and a blueprint for how universities could leverage their internal records to ensure that fewer exceptional students miss out on selective opportunities.