KEIO/KYOTO JOINT GLOBAL CENTER OF EXCELLENCE PROGRAM Raising Market Quality-Integrated Design of “Market Infrastructure” KEIO/KYOTO GLOBAL COE DISCUSSION PAPER SERIES DP2011-009 Does Mandating Wider Subject Variety Create Incentives to Learn? Evidence from Public High School Admission Policies in Japan Hideo Akabayashi* Michio Naoi** Abstract This paper provides evidence on whether mandating wider subject variety on high school entrance exams affects long-term educational achievement using Japanese historical experiences. In Japan, where high school education is non-compulsory, prefectural boards of education have retained the freedom to set admission criteria for public high schools within their prefecture, including the number of subjects tested on entrance exams. Using prefectural-level panel data over 33 years, we estimate the effect of the number of subjects tested at the time of high school entrance on the prob- ability of college attendance three years later. We find that the variety of subjects tested has a posi- tive effect on the later college enrollment. Our findings are broadly consistent with the prediction of the incentive theory of testing (Lazear, 2006) and the heterogeneity of human capital. *Hideo Akabayashi Faculty of Economics, Keio University **Michio Naoi Faculty of Marine Science and Technology, Tokyo University of Marine Science and Technology KEIO/KYOTO JOINT GLOBAL COE PROGRAM Raising Market Quality-Integrated Design of “Market Infrastructure” Graduate School of Economics and Graduate School of Business and Commerce, Keio University 2-15-45 Mita, Minato-ku, Tokyo 108-8345, Japan Institute of Economic Research, Kyoto University Yoshida-honmachi, Sakyo-ku, Kyoto 606-8501, Japan