ABSTRACT High‐stakes exams can be used to rank and select candidates for job openings, and the ability of those selected hinges on the design of the exam. I propose a method to model candidates' performance to assess how effective the exam is at selecting high‐ability candidates. I showcase this method with the competitive exam of the Bank of Italy. This is also an interesting case to study discrimination, as women are selected with a lower probability than men. The results suggest that the exam tends to select those candidates with a higher ability level. Finally, some simulations show how certain modifications to the exam structure could potentially enhance the selection process by increasing the average ability of the selected candidates.
Santiago Pereda‐Fernández (Wed,) studied this question.