3rd grade success leads to riches, per University of Texas research

Do well in third grade and you're likely to earn more money as a working adult, per research findings from the University of Texas involving millions of elementary school students across the state.

What they found: Researchers have long known that high test scores in the early years of a student's education forecast longterm academic success.

• The study, however, shows that class rank alone leads to better subsequent test scores, stronger graduation rates, better college graduation rates and someday higher wages.
• Of note: The effect is particularly strong for non-white and low-income students.

By the numbers: A child enrolling in a third grade class in which that student is at the 75th percentile relative to peers, rather than the 25th, increases his or her real wages between the ages of 23-27 by $1,500 annually, or approximately 7%.

How they did it: Economists from UT and other universities examined data of more than 3 million 8- and 9-year-old students in Texas.

What they're saying: "The kids who rank higher in their particular pond get more attention and resources, and come to think of themselves as better students, which helps them with their later studies," said Richard Murphy, a co-author of the study "Class Rank and Long-Run Outcomes" and assistant professor of economics at UT Austin.

Between the lines: The impact of rank on male and female students was found to be similar for most outcomes.

• But non-white students and those with free or reduced-price lunch are significantly more affected by class rank than their more advantaged peers. The data shows that disadvantaged groups gain more from being highly ranked and lose more from being lowly ranked among peers.

Parents take note: Researchers observe that while there are advantages to sending students to schools with higher average test scores — your kid is then more likely to have a lower class rank.

• These sorts of calculations will be familiar to parents angling to get their kids into UT, which automatically admits Texas students in the top 6% of their high school graduating class.

The bottom line: It's never too early to stress out about how your kid is doing in school.