The relationship between economics at high school and academic performance in a first-year university microeconomics course

With business studies now an option alongside traditional economics and accounting at NCEA (National Certificate of Educational Achievement) level three in New Zealand secondary schools, many students interested in business may not have taken economics before university. This study examines whether prior completion of level three NCEA economics standards is associated with greater academic success in an introductory microeconomics course at the University of Canterbury. We find that students who completed at least one level 3 economics standard score, on average, about 12 percentage points higher in the course and are about 12 percentage points less likely to fail compared to those without this background. However, after controlling for student fixed effects, the advantage shrinks considerably: students perform only about 2.5 percentage points better on university assessments that closely align with the NCEA standards they studied, and this effect is only marginally significant at the 10% level. These results suggest that the true causal impact of passing economics in high school on subsequent university performance, if anything, is likely to be small.