Behavioral inattention and human capital accumulation

I use data from a standardized test applied to second and eighth graders in rural Peru to show that inability to correctly interpret test scores can affect schooling outcomes persistently. Marginally classifying as “remedial” in second grade math reduces rural males’ eighth grade scores by 0.18 standard deviations, compared to students that obtained marginally higher scores and were classified as “in transition” in second grade. This paper provides novel evidence on the mechanisms at play, showing that results owe to classroom environment and household resource reallocation.