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Inequalities in decision-making at critical junctions in life: The role of ability signals for sorting and selection

Project description

How grades and degrees impact inequality

Decisions made during school, university, and the job search process can significantly impact individuals’ life opportunities and perpetuate existing inequalities. To address these disparities, it is essential to comprehend decision-making dynamics, including how ability signals are interpreted. The ERC-funded OPPORTUNITY project investigates the role of ability signals (grades, standardised tests, certificates, degrees, or CV information) in shaping inequality within high-stakes decision-making processes. Specifically, the project examines how these signals may reinforce discrimination based on socio-economic background. Overall, the project aims to identify the causal effects of various ability signals on effective sorting and selection processes. OPPORTUNITY also provides policy recommendations aimed at promoting equality of opportunity.

Objective

School track decisions, university or major choice, and initial job finding are all decisive for seizing life opportunities. When individuals from different socio-economic groups make different high-stakes decisions at these critical junctions, this can reinforce existing inequalities and lead to lock-in effects that are difficult to undo later in life. Understanding decision-making at these stages is thus fundamental to analyse and tackle inequality of opportunity.

Individuals and evaluators make critical educational or occupational decisions under imperfect information due to uncertainties about true ability and future productivity. To resolve uncertainty, ability signals and their interpretation both received and sent are crucial components of decision-making, sorting and selection.

OPPORTUNITY analyses the role of ability signals (such as grades, standardized tests, certificates, degrees, or CV information) for inequalities in high-stakes decision-making under uncertainty and inequality-reinforcing statistical and stereotypical discrimination by socio-economic background. To this end, it will draw on i) experimental methods in lab and field to study the role of social environment and ability signals for unequal educational and occupational choices; ii) administrative records to obtain information about absolute and relative ability signals (grades and degrees) awarded at various institutions over time; iii) econometric techniques that help exploit exogenous variation to make causal inference about the role of SES and different ability signals for efficient sorting and selection.

OPPORTUNITY will promote an innovative research agenda providing novel answers on how to mitigate the unfair and inefficient allocation of talent. It will inform about policies that provide resources or changing ability signals to enhance equality of opportunity, one of the most urgent topics in Europes diverse, aging, and increasingly segregated societies.

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Host institution

UNIVERSITAT ZU KOLN
Net EU contribution
€ 1 268 750,00
Address
ALBERTUS MAGNUS PLATZ
50931 Koln
Germany

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Region
Nordrhein-Westfalen Köln Köln, Kreisfreie Stadt
Activity type
Higher or Secondary Education Establishments
Links
Total cost
€ 1 268 750,00

Beneficiaries (2)