The Final straw: High school dropout for marginal students

We investigate the consequences of failing a high-stakes exam in Norwegian high schools. Second-year high school students are randomly assigned to either a locally graded oral exam or a centrally graded written exam. Students assigned to written exams consistently receive lower grades and have a greater probability of failing, particularly in the case of already low-performing students. Because passing the exam is required to obtain a high school diploma, this translates into a reduction in high school graduation rates that remains significant over time, permanently shifting a group of marginal students into dropping out of high school altogether. We show that these marginal students are severely disadvantaged across several dimensions, even more so than dropouts in general. Our analysis of what predicts dropout among these marginal students suggests that effective policies for combating high school dropout should target students exclusively on the basis of poor academic performance, rather than other measures of disadvantage such as socioeconomic status, even though these characteristics are associated with dropout among students in general.