The following is an excerpt from What Lies Ahead for America’s Children and Their Schools, a new book edited by Chester E. Finn, Jr. and Richard Sousa for Hoover Institution Press. This excerpt comes from a chapter called “Holding Students to Account” by Paul E. Peterson.
There is no national exit exam policy in the United States set either by the federal government or by a consortium of state governments. US policy stands in contrast to the practice in many other countries. In England, for example, students at age 16 are expected to take “ordinary” or “O” level exams in several subjects. If they remain in secondary school beyond that age, they take “advanced” or “A” level exams. Similar policies are in place in France, Germany, Australia, and many other countries. Practice in Canada varies by province. In Alberta, student performance on an external examination determines 50 percent of the grade in relevant courses taken by graduating seniors. In many Asian countries (Japan, Korea, Singapore), performance on exit exams is the key to access to the university system. In all these instances, student performance is evaluated at multiple levels of accomplishment rather than on a simple, dichotomous pass/fail basis.
In 2011, twenty-four states asked students to pass a test in order to graduate from high school.  The movement began in Texas, when Ross Perot inaugurated a “pass to play” campaign that banned participation in sports and other extracurricular activities by those who did not earn a “C” in the classroom. Perhaps because of these origins, Southern and border states constitute thirteen of the twenty-three states that require exit exams. However, exams in most states do not require knowledge of specific subject matter taught in high school courses; instead, they are general math and reading exams for which no specific subject-matter knowledge is expected. Further, exam-passing thresholds are set at such low levels that the test constitutes a challenge only for the lowest–performing students. 
The state of New York does have subject-specific exit exams, which are known as Regents exams, named after the state board responsible for education policy. These exams were put in place during the Civil War when New York wanted to make sure that state-funded private schools were not admitting students willy-nilly so as to get state aid while helping young men avoid the draft. Today, to earn a Regents diploma, students must score sixty-five out of one hundred points on exams in English, global history and geography, US history and geography, a math subject, and a science subject. Bishop estimates that the exams have a positive impact on student performance in New York State,  but further studies are needed to identify their impact precisely.
Some have argued that Advanced Placement (AP) exams serve as the functional equivalent of a comprehensive system of subject-specific, externally validated exit exams. It is true that many (but certainly not all) high schools offer some AP courses that prepare students for one or more of the thirty-four end-of-course examinations available from Education Testing Service (ETS), a nationally respected, private testing agency. In recent years, about a third of all students who graduate from high school have enrolled in such a course. According to ETS, the number of students “passing” an AP exam in at least one subject (scoring at least a three on a five-point scale) increased from a little over three hundred thousand in 2002 to nearly five hundred and seventy-five thousand in 2012. But that number is still less than 20 percent of high school graduates and only about 15 percent of all those in the age cohort (as only about 75 percent of high school students graduate within four years). However, these numbers do not tell us the percentage of students who pass several examinations at level four or level five, which colleges typically use to decide whether student performance is high enough to allow advanced placement. Our best estimate, based on the number of passed tests and the average number of tests taken by any one student, is that only 7 percent to 8 percent of the age cohort in 2012 passed at a level necessary to secure an advanced placement in most institutions of higher education.  In other words, over 90 percent of those in recent age cohorts are not performing at a reasonably high level on any externally administered, subject-specific examination, a possible explanation for the much lower percentage of US students than students in many other advanced industrial societies who are performing at the “advanced” level on international tests.
Effects on Student Performance
Although studies of the impact of exit exams on student performance in other countries are scarce, one careful study suggests that student performance is higher in countries that require such examinations.  Much of the research on exit exams within the United States focuses on the consequences for those who fail to pass exit exams, with little attention given to the possible boost in achievement among the graduating cohort as a whole. Yet a few estimates of the impact of merit-based scholarship programs on student achievement have been undertaken. A quasi-experimental study of the impact of a merit-based college scholarship program found positive effects on high school student performance in Kalamazoo, Michigan, for example. 
The impact of the exit exam policy in Massachusetts is worth noting, especially since the proficiency threshold for passing the state test is one of the highest in the United States. When the state in 2003 required students to pass the proficiency bar on the high school examination offered to tenth graders, critics claimed many students would fail. But when students were faced with the exam, the passing rate, even for first-time test-takers, shifted dramatically upward. Those who failed were given opportunities to take the test as many as five additional times. The number of students who never passed the exam was so small that the test quickly became an accepted practice. Significantly, student test performance climbed at other grade levels as well (fig. 1). The state’s performance on NAEP also shifted upward so that it became the top-performing state in the country. Its performance on international tests ranks with the world’s leaders. How much the introduction of a high school graduation examination requirement has contributed to recent gains in student performance in Massachusetts isn’t known.  But the former secretary of education for the state of Massachusetts, David Driscoll, during whose tenure the policy was introduced, attributes much of the state’s success to the introduction of the exam requirement (even though he implemented numerous other policy changes as well).
These examples cannot be taken as anything other than suggestive evidence that exit exams have the desired consequences which Bishop and others anticipate. Much more scholarly work needs to be done to ascertain the long-term effects of exit examinations and merit-based college scholarships on student achievement and longer-term outcomes. Undoubtedly, much depends on the design of the policy.
Politics of Assessment
In principle, the American public is ready to support implementation of a more rigorous system of student accountability. According to the 2012 Education Next poll, 72 percent of Americans think that students should pass an exam before receiving a high school diploma, with only 12 percent opposed, the rest being indifferent. Also, 63 percent of the general public supports national standards, with another 30 percent indifferent, and only 7 percent standing in opposition. Levels of support for these policies are no less high among parents and teachers.
State political leaders may nonetheless be wary of setting more than minimal performance levels on exit exams. If too many students fail the exams, even after multiple attempts, state officers will be asked to lower the standards or explain low levels of student performance. Such pressures shaped the implementation of the federal law, No Child Left Behind.  Many states set low proficiency levels, thereby giving the appearance that more students were proficient in math and reading than was actually the case. Only five states—Massachusetts, Missouri, Washington, Hawaii, and New Mexico—set their state proficiency bar at the world-class level set by NAEP.  The low proficiency threshold set in California, for example, obscures the fact that it is among the ten states that have the lowest levels of student achievement. 
Not only have most states set a low proficiency bar, but pressures to ignore NCLB strictures intensified as the 2014 deadline drew nigh when the law expected all students to be proficient. As the deadline approached, increasing numbers of schools were found to have failed to meet expectations. Embarrassed by these developments, school districts attacked the NCLB standards, and the US Department of Education began providing state waivers that allowed many states to exempt themselves from NCLB requirements. One can expect similar political pressures to develop if exit exams are put into place.
Such political pressures might be addressed by establishing alternative examinations or by setting multiple cut points on one examination. Those students who wish to show high levels of competence (necessary for advanced placement in college or to boost their chances of winning admission to a selective college) could take the advanced version of the end-of-the-year examination, while other students could be given the opportunity to take the “ordinary” examination. In Great Britain, a similar arrangement expects all high school students to pass several “ordinary” examinations at age 16; those who want to demonstrate higher levels of competence are also examined later on at the “A” level in the subjects of their choice. Both exams have multiple cut points allowing for more precise evaluations of student performance than simple pass/fail. Similarly, the Regents examination in New York State can now be taken at either the “ordinary” or the “advanced” level.
Paul E. Peterson is the Henry Lee Shattuck Professor of Government and Director of the Program on Education Policy and Governance at Harvard University, a Senior Fellow at the Hoover Institution at Stanford University, and Editor-In-Chief of Education Next, a journal of opinion and research.
Reprinted from What Lies Ahead for America’s Children and Their Schools, edited by Chester E. Finn Jr. and Richard Sousa, with the permission of the publisher, Hoover Institution Press. Copyright © 2014 by the Board of Trustees of the Leland Stanford Junior University.
Notes 1. Digest of Education Statistics, 2011, National Center for Education Statistics, table 177. 2. Thomas Dee, “The ‘First Wave’ of Accountability,” in No Child Left Behind? The Politics and Practice of School Accountability, ed. Paul E. Petersen and Martin R. West (Washington, DC: Brookings Institution Press, 2003). 3. Bishop, “Nerd Harassment.” 4. Although ETS does not provide the exact numbers of students who scored at least a four on one exam in publicly available data, nearly 40 percent of the exams that receive a grade of three, four, or five are scored a three. To achieve our estimate we divided the number of tests passed at levels four and five by the average number of tests taken by a single student (three and a half tests) and then divided that number by the number of seventeen-year-olds in the population in 2012. The 7 percent to 8 percent of the age cohort passing at the four and five level in 2012 is up from 3.5 percent in 2002. 5. Ludger Woessmann, “Central Exit Exams and Student Achievement: International Evidence,” in No Child Left Behind?, ed. Peterson and West. 6. Timothy Bartik and Marta Lachowska, “The Short-Term Effects of the Kalamazoo Promise Scholarship on Student Outcomes” (working paper, Upjohn Institute, 2012). 7. Achieve, “Do Graduation Tests Measure Up? A Closer Look at State High School Exit Exams” (Washington, DC: Achieve Inc., 2004.) 8. NCLB asks schools to test all students in grades three through eight and once in high school. Districts were told to report aggregate student performance at each school, and each year schools were expected to make “adequate yearly progress” toward a goal of 100 percent student proficiency by the year 2014. Penalties were imposed upon schools that fell short of meeting the goals established by the law. But nothing in the law held students responsible for their own performance. 9. Paul E. Peterson and Peter Kaplan, “Despite Common Core, States Still Lack Common Standards,” Education Next 13, no. 4 (Fall 2013); and Paul E. Peterson and Carlos X. Lastra-Anadón, “State Standards Rise in Reading, Fall in Math,” Education Next 10, no. 4 (Fall 2010): 12–16. 10. Hanushek, Peterson, and Woessmann, Endangering Prosperity.