Media Release

High-stakes exams are ‘misleading’ and have long-term negative consequences because they can’t take account of a ‘bad day’, says report

High-stakes exams can provide measures of student quality that may be imprecise and damaging to individuals and the economy in the long-term, according to a new report by the University of Warwick’s Centre for Competitive Advantage in the Global Economy (CAGE), published by think tank the Social Market Foundation (SMF).

The report, The long term economic consequences of having a bad day: How high-stakes exams mismeasure potential, draws on unique new research looking at the long-term consequences of poor performance in high stakes exams due to random factors not linked to ability.

The research shows that examination candidates can have a ‘bad day’ for many reasons, including minor infection, migraine, hay fever, menstruation, disturbed sleep, and atmospheric pollution. When the stakes are high, as with exams used to rank students or admit them to further training or employment, there can be permanent consequences for the individual and for society. For example, students can be incorrectly directed to further training or to inappropriate occupations.

The research specifically studies the impact of fluctuations in air pollution levels on student test scores as a way of measuring the impact of a random factor on high-stakes exam performance. It is unique in showing that the immediate productivity damage (as opposed to long term health damage) to students from pollution can lead to a significant decline in student performance. CAGE academics also examined these students during adulthood (8-10 years after the exams) and find that pollution exposure during exams causes lasting damage to post-secondary educational attainment and earnings later in life.

In the UK, high-stakes exams include the Eleven Plus, A Levels and bespoke university admissions tests and the consequences of this policy are largely unknown. The report argues that such measures of ability can lead to students being unfairly restricted in future education and employment because of factors outside their control, and that there is a lack of evidence on the consequences of these random factors on exam results.

Professor Victor Lavy, report author and professor of economics at the University of Warwick, commented:

“Our analysis highlights that high-stakes exams can provide measures of student quality that may be imprecise and damaging in the long-term. By not taking into account the impact of a ‘bad day’ on performance, high-stakes exams can lead to students being inefficiently assigned to further training or occupations. This is bad for both the individual, due to potentially damaged earnings later in life, and future labour productivity.”



  • A copy of the report, The long term economic consequences of having a bad day: How high-stakes exams mismeasure potential, is available here.
  • About the Social Market Foundation:
    The Social Market Foundation (SMF) is an independent, non-partisan think tank. We believe that fair markets, complemented by open public services, increase prosperity and help people to live well. We conduct research and run events looking at a wide range of economic and social policy areas, focusing on economic prosperity, public services and consumer markets. The SMF is resolutely independent, and the range of backgrounds and opinions among our staff, trustees and advisory board reflects this.
  • About CAGE:
    Established in January 2010, CAGE is a research centre in the Department of Economics at the University of Warwick. CAGE is carrying out a ten year programme of innovative research. The centre’s research programme is focused on how countries succeed in achieving key economic objectives such as improving living standards, raising productivity, and maintaining international competitiveness, which are central to the economic wellbeing of their citizens. Our research analyses the reasons for economic outcomes both in developed economies like the UK and emerging economies such as China and India. We aim to develop a better understanding of how to promote institutions and policies which are conducive to successful economic performance and endeavour to draw lessons for policy makers from economic history as well as the contemporary world. Research at CAGE examines how and why different countries achieve economic success. CAGE defines ‘success’ in terms of well-being as well as productivity. The research uses economic analysis to address real-world policy issues. The centre is distinctive in providing a perspective that draws on economic history as well as economic theory and is applied to countries at various different stages of economic development.
  • Interviews/media enquiries:
    Please contact Sean O’Brien, SMF communications manager via


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