Abstract
We investigate the relationship between peers' abilities and educational outcomes at the end of high school using data from the rich Longitudinal Study of Young People in England (LSYPE) matched to the National Pupil Database of children in state schools in England. In particular, we focus on the effect of peers' abilities, measured through achievements in Key Stage 3 (Age 14), on high powered test scores at Ages 16 and 18, and on the probability of attending university. Our identification strategy is based on a measure of the peers of peers' ability. In particular, for each individual, we look at her high school peers and select their primary school peers who do not attend the same high school and who did not attend the same primary school as the individual. We then use peers-of-peers ability, measured using Age 11 test scores as an instrument for high school average peer ability, measured using Age 14 test scores. We also use quantile regression to explore the effect of peers' ability on different parts of the distributions of the outcomes. Our results show that average of peers' abilities has a moderate positive effect on test scores at Ages 16 and 18, and that being in a school with a large proportion of low-quality peers can have a significantly detrimental effect on individual achievements. Furthermore, peers' ability seems to have a stronger effect on students at the bottom of the grade distribution, especially at Age 16.
Highlights
Establishing the presence and size of peer effects in education is important because peer effects imply that educational interventions have multiplier effects (Glaeser et al, 2003)
The aim of the present paper is to investigate the relationship between average peer ability and individual educational attainment in high-stakes educational tests at the end of compulsory schooling at age 16, and at the end of high school at age 18, using a large, rich, and recent data set of English teenagers
We are measuring the average performance of peers using a subsample of individuals who are in the same high school, i.e. only those who are captured in the Longitudinal Study of Young People in England (LSYPE) data set
Summary
Establishing the presence and size of peer effects in education is important because peer effects imply that educational interventions have multiplier effects (Glaeser et al, 2003). The existence of heterogeneity in peer effects across the ability distribution provides a rationale for the efficient mixing of pupils in a school or in a classroom. An optimal student mix may raise the average attainment of a group in ways that other educational interventions may not be able to achieve. These considerations have implications for cost–benefit analyses of educational policy prescriptions.
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