Do Swedish upper Secondary Schools Compete through Grade Inflation?

Abstract

This paper studies the relationship between school competition and grade inflation in Swedish upper secondary schooling. It contributes to the literature by introducing a new measure of grade inflation not previously used in relation to competition, as well as a new measure of school competition. The results indicate that competition does not reliably explain grade inflation but that there are large differences in grade inflation between public and non-public schools and between for-profit and non-profit schools. The differences remain even when controlling for competitive environment.