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In specifying a minimum passing score on examinations that students must pass to obtain a high school diploma, states divide a continuous performance measure into dichotomous categories. Thus, students with scores near the cutoff either pass or fail despite having essentially equal skills. The authors evaluate the causal effects of barely passing or failing a high school exit examination on the probability of graduation using a regression discontinuity design. For most Massachusetts students, barely failing their first 10th grade mathematics or English language arts (ELA) examination does not affect their probability of graduating. However, low-income urban students who just fail the mathematics examination have an 8 percentage point lower graduation rate than observationally similar students who just pass. There is no analogous impact from just passing or failing the ELA exit examination. For these urban, low-income students, barely failing the mathematics test does not affect the likelihood of on-time grade promotion, but it does cause students to be 4 percentage points more likely to drop out of school in the year following the test. Low-income urban students are just as likely to retake the test as equally skilled suburban students, but they have less success on retest.
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