An excellent label of acknowledgement and a disappointing label of excellence?

In 2010, the Dutch government proposed a range of policy measures to stop the observed decline in verifiable performance of both primary and secondary students in internationally comparable tests and final exam grades. One of the introduced policy instruments was a label of excellence for high-performing schools. The label can be regarded as a non-financial acknowledgement and reward of effort and a signal of quality. Whereas initially schools were mainly selected on the basis of their objectively verifiable performance on school results, currently a school can become excellent if it distinguishes itself through its unique didactic approach. I have analysed the (un-)intentional effects of the policy on exam scores and student inflow amongst excellent schools, in order to determine to what extent the policy has affected the objective performance of students and intervenes with the school choice of future students. Moreover, the paper in its entirety addresses the concern that the label of excellence has increased inter-school and socio-economic inequality. For the latter claim, no evidence has been found. The results from the fixed-effects estimation indicate a negative causal relationship between the label of excellence and exam scores in both primary and secondary schools. Students in secondary school score 0.0615 points less (-0.24SDs) on the final nationwide exams. This significant finding is highly robust to different model specifications. Students in primary school score almost 1 point less (-0.22SDs) on the Cito test in the year the school has become excellent, although this coefficient is less consistently estimated. The decline in test scores is attributable to the bureaucratic hassle of obtaining the label of excellence. Furthermore, there is tentative evidence that student inflow goes up (with a lag) in the wake of becoming excellent. More research is needed on the persistency of the effect of the label of excellence on student outcomes and the impact of the label on the performance of students in non-excellent schools, however, it seems plausible to assume that the label of excellence has failed to boost the average performance of students in the Netherlands.