Peer Effects in Math and Science

Abstract

This paper examines how skills are shaped by social interactions in families. We show that older siblings causally affect younger sibling’s educational choices and early career earnings. We focus on critical course choices in high school and overcome the identification challenges of estimating spillover effects in education by exploiting exogenous variation in choice sets stemming from a pilot scheme. The pilot induced a random subset of older siblings to choose advanced math-science at a lower cost, while not directly affecting the course choices of younger siblings. Therefore, any influences of the pilot scheme on the younger siblings may be attributed to the social influence of the older sibling. We find that younger siblings are 2-3 percentage points more likely to choose math-science if their older sibling unexpectedly could choose math-science at a lower cost. Spillovers have a lasting impact on the career outcomes of younger siblings, and they are strongest among closely spaced siblings, in particular brothers. We argue that competition is likely the driving force behind younger siblings conforming to their older siblings’ choices.