Gen Z’s surge in straight A’s is quietly shrinking their paychecks

(SeaPRwire) –   While straight-A report cards are more prevalent than ever for American teenagers, the benefits are not what parents might expect. A recent study from the National Bureau of Economic Research indicates that when teachers assign “easy A” grades, students are more prone to skipping classes, performing worse on subsequent tests, and earning less money in the years that follow. The researchers estimate that for a typical high school class, grade inflation could reduce the group’s future earnings by approximately $213,000, translating to about $150 annually for each grade that is subtly elevated.

These findings emerge as President Donald Trump advocates for a crackdown on grade inflation in universities, linking federal funding to institutions’ commitment to maintaining grading standards. Gen Z is already the first generation to exhibit lower scores than their parents on certain cognitive performance metrics, as reading habits decline and schools increasingly prioritize grades over genuine learning.

The study, titled “Easy A’s, Less Pay: The Long-Term Effects of Grade Inflation,” determined that for individual students, this trend results in a reduction of annual earnings by roughly $150 for every grade increase, such as moving from a B to a B+.

“Average grade inflation is detrimental,” stated Nolan Pope, a labor economist at the University of Maryland and one of the study’s researchers. “Students are less likely to learn when it’s very easy to achieve an A. They invest less time and effort.”

The discussion surrounding grade inflation has extended from classrooms to the highest levels of government. President Donald Trump addressed the issue last November, establishing a higher education agreement that ties federal funding for universities to strict guidelines set by his administration, prohibiting grade inflation (or deflation). This practice may be negatively impacting young people. Gen Z is the first generation to demonstrate lower cognitive capabilities compared to their parents. Many young individuals are abandoning books at unprecedented rates, and some are even failing to meet previous expectations for reading assignments. From high school through college, grade inflation has provided educational institutions with increasingly questionable value propositions.

The researchers examined administrative high school records from Los Angeles and Maryland, correlating them with long-term postsecondary and earnings data. They quantified grade inflation by comparing student grades against their actual performance on standardized tests.

The hidden costs: absences, suspensions, and dropping out

Inflation, whether in grades or currency, diminishes value. Wealth managers are encountering a peculiar challenge in 21st-century America: the proliferation of “everyday millionaires” who are illiquid, with substantial wealth tied up in housing, yet often struggle to afford goods they feel entitled to based on their stated worth. In essence, the straight-A students likely have parents with straight-A investment portfolios, but both end up with B- or even C-level experiences in this inflated economic landscape.

“The economy wasn’t designed to accommodate this many people with this much money,” Nick Maggiulli, the New York Times bestselling author of *The Wealth Ladder*, commented in an interview last year. “On a relative basis in the United States, competition for these higher-end goods is intense, so now it feels like we’re all canceling each other out with all this extra wealth,” he added. Similarly, in the classroom, when high scores are distributed liberally, the A grade loses its coveted value.

The NBER study revealed that it is not solely future earnings that are being devalued. Grade inflation can actually lead to outcomes opposite to what is intended. Students assigned to teachers who inflate grades are more likely to perform poorly on future tests. They are less likely to graduate high school and even less likely to enroll in college. Most of these consequences, naturally, occur long after the student has submitted their final exam, making them harder to detect.

Teachers who generously award easy As also made it easier for students to coast through their studies. The research indicated a correlation between higher grade inflation and an increase in absences and suspensions, suggesting that when academic standards are lowered, student engagement and school discipline may decline accordingly.

“It ends up being somewhat detrimental to the student,” Pope remarked. “No one is really addressing that harm because it isn’t visible until much later.”

However, the study did find that grade inflation benefited certain students, particularly those at risk of failing. When teachers raised scores for students facing the possibility of failing—for instance, from an F to a D—this actually proved beneficial, preventing those students from repeating a grade and improving their high school graduation rates.

Regardless of the outcome, grade inflation has gained momentum over the past decade. And despite the president’s efforts, the trend shows no signs of abating. Pope noted that grade inflation persists because all parties involved stand to gain from it, creating a perverse incentive that perpetuates this seemingly harmless practice semester after semester.

“As a teacher, it’s generally easier,” he explained. “You receive fewer complaints. Parents are pleased. Students are happier if you assign slightly higher grades. A school typically appears better if its grades are higher. It benefits everyone.”