Vertical Status: Evidence from High-Rise Condominiums

Learning from Round Test Scores: University Field Choices and Career Outcomes

This study explores the influence of heuristics and self-perception of academic abilities on university decisions and labor-market outcomes. Using a comprehensive dataset from Israel, which includes university entrance test scores, university applications, and employment data, I investigate how perceived test scores influence choices of university fields and subsequent career paths. The findings reveal that surpassing a round score cutoff in university entrance tests significantly increases applications to high-earning fields, even though admission chances remain low around this cutoff. In response, individuals take proactive measures to improve their admission prospects. This behavior indicates that test-takers perceive round scores as a stronger signal of ability, motivating them to pursue more ambitious educational goals. Results also suggest that these efforts eventually pay off in the form of higher earnings more than a decade after the test. The findings highlight individuals’ uncertainty when making life-changing choices and demonstrate how, due to left-digit bias, even tiny changes in test-score signals can shape educational and career trajectories.