Peer effects in college: how peers' performance can influence students' academic outcomes

Abstract

There is a large and growing literature on peer effects as researchers have long begun investigating the role of social interactions for explaining a series of individual behaviors. Schools are very important environments for studying peer effects. A sizable portion of humancapital accumulation takes place in schools and this has consequences for individual productivity and wages, for instance. This project proposes to investigate the existence of peer effects in academic outcomes (such as grade point average (GPA), grade in mandatory courses, obtained credits, dropout and retention rates) in a developing country. It does so by exploring specificities in the student's admission process of a Brazilian federal university, which works as a natural experiment. Individuals who are comparable in terms of previous academic achievement - based in their score in the admission exam - end up having classmates with better or worse performance in college because of the assignment rule of students to classrooms starting classes either in the first or in the second semester. Thus, our identification strategy for estimating peer effects on academic outcomes eliminates the endogenous selfselection into groups that would otherwise undermine the causal inference of peer effects. This project is a necessary step before investigating the impact of peer quality on wages using the same natural experiment. This future agenda will allow us to deepen our understanding of how peer effects can also have long-lasting impacts. (AU)