Abstract
Using two nationally representative datasets, we find large differences between Black and White children in teacher-reported measures of noncognitive skills. We show that teacher reports understate true Black-White skill gaps because of reference bias: teachers appear to rate children relative to others in the same school, and Black students have lower-skilled classmates on average than do White students. We pursue three approaches to addressing these reference biases. Each approach nearly doubles the estimated Black-White gaps in noncognitive skills, to roughly 0.9 standard deviations in third grade.