There’s plenty of evidence that average grades, GPAs, and graduation rates have gradually been rising—and fewer kids have been failing—in recent years. What impact is this having on students? A recent University of Maryland working paper helps answer that question by examining two large groups of high school students.
The four-person research team looks at data from all high schools in the Los Angeles Unified School District (LAUSD) and from all public high schools in the state of Maryland. The LAUSD dataset covers more than 985,000 high school students between 2004 and 2013. Although it lacks demographic information, it does include annual end-of-year test scores, allowing for detailed measurement of grade inflation. The Maryland dataset, by contrast, contains far fewer end-of-course test scores—only algebra, geometry, and either ninth or tenth grade English—but includes detailed demographic information on students, as well as data on their college enrollment and labor market participation after graduation. It covers more than 1.6 million high school students between 2013 and 2023.
The researchers constructed two measures of teacher-specific grade inflation. The first is “mean grade inflation,” which uses a comparison between end-of-course test scores and class grades to determine how much a given teacher inflates the average student’s class grade. This metric includes controls for a number of student characteristics and is bias-checked against students’ past and future scores to account for as many unobservable influences on test performance as possible. The second is “passing grade inflation,” a novel measure that determines how likely a teacher is to pass a student who received an F grade in the class. That is, a binary “yes, they did” or “no, they didn’t” pass students who scored below the grading threshold for failing.
The analysis finds that the two types of grade inflation have very different impacts on students. Mean grade inflation has an overall negative effect, as it lowers future test scores, reduces the likelihood of students graduating from high school, decreases college enrollment, shrinks individuals’ earnings, and more. For example, having math and English teachers who are, on average, 1 standard deviation higher in mean grade inflation decreases student test scores in the next year by approximately 0.03 standard deviations, reduces students’ likelihood of graduating high school by 0.8 percentage points, and lowers students’ likelihood of ever taking the SAT by 0.8 percentage points. Moreover, although the negative effects are similar for students of all abilities, the grade retention and SAT-taking impacts are worse for higher-performing students.
Passing grade inflation, by contrast, conveys more positive impacts, such as reducing the likelihood of students being held back a grade, increasing the likelihood of high school graduation, and boosting initial enrollment in two-year colleges. Having math and English teachers who are, on average, 1 standard deviation higher in passing grade inflation increases students’ next-year test scores by 0.01 standard deviations and raises the likelihood of graduating high school and taking the SAT by 0.6 and 0.7 percentage points, respectively. These positive impacts are strongest for students in the bottom of the eighth of the grade GPA distribution.
The researchers don’t make any recommendations for policy or practice, but the implications of their findings are clear. Two different forms of grade inflation are occurring in Los Angeles and Maryland—via deliberate teacher actions—with a set of direct and measurable short- and long-term academic impacts on students. Mean grade inflation is, overall, detrimental to students, while passing grade inflation is somewhat more defensible. If grade inflation can be curbed, the issue is moot. But if it continues in Los Angeles or Maryland or (likely) everywhere else, then teachers, principals, and stakeholders need to be aware of those impacts and calibrate their inflationary behaviors to minimize negative consequences for students.
SOURCE: Jeffrey T. Denning, et al., “Easy A’s, Less Pay: The Long-Term Effects of Grade Inflation,” University of Maryland Working Papers (October 2025).
