A trade-off between informativeness and equality in high-stakes standardised testing | VoxDev

Consistent with the common criticism of admission tests, we find that socioeconomic gaps in performance expanded on higher-stakes assessments. Yet we find that higher stakes increased the informativeness of exams. This implies that decision-makers face a fundamental tradeoff between equality and informativeness in identifying talent.

Conclusions: The dual goals of diversity and informativeness in selecting talent

Our research shows that high-stakes entrance exams provide better information about students' potential for academic success, but they also exacerbate existing inequalities in educational access. These findings highlight a crucial trade-off for college admission officers who rely on test scores as an instrument to identify talent while also making efforts to diversify the student body. This trade-off may extend to other high-stakes settings such as hiring processes at prestigious firms, where decision-makers must balance identifying top talent with promoting diversity.

One potential solution to this challenge is the introduction of a second policy instrument. Colleges could design maximally informative test scores to identify academic potential while employing a separate tool to improve diversity. For example, Brazilian universities reserve slots for disadvantaged applicants while selecting top scorers within these groups (Machado et al. 2024, Oliveira et al. 2024). However, institutions in countries like the United States face legal constraints in addressing this trade-off. We hope that future research will uncover new policy cowtools to mitigate this important trade-off.