In this study, we examine how the social class of parents affects a child’s grade. As the results of a statistical analysis of Norwegian economics students show, students from academic backgrounds tend to do better than their working-class counterparts. The differences are smallest at preparatory levels and are highest at master’s levels. The economics student is expected to outperform their working-class peers, and the effects of social background are not constant over the course of a student’s educational career, but they do increase over time.
The concept of grade inflation is a widespread economic phenomenon in which workers from different social classes and ability levels are assigned jobs according to their grades. While this may lower the aggregate wage of workers from the lower classes, it may also benefit higher-ability students. The idea behind grade inflation is that employers use social origin as a signal for productivity and can make better hires. The theory behind this process is not clear. Nevertheless, this method is often used in practice.