Does grade inflation affect the credibility of grades? Evidence from US law school admissions

While the nature and causes of university grade inflation have been extensively studied, little empirical research on the consequence of this phenomenon is currently available. The present study uses data for 48 US law schools to analyze admission decisions in 1995, 2000, and 2007, a period during which university grade inflation appears to have been prevalent. Controlling for a number of admissions characteristics, the analysis suggests that higher rates of grade inflation were associated with greater increases in emphasis on standardized test scores between 1995 and 2000. On the contrary, although grade inflation continued between 2000 and 2007, law schools appeared to have reduced the importance of both grades and test scores as admissions factors. The implication of such behavior on minority representation in these institutions is also discussed.