Working Paper: NBER ID: w22042
Authors: Scott E. Carrell; Mark Hoekstra; Elira Kuka
Abstract: A large and growing literature has documented the importance of peer effects in education. However, there is relatively little evidence on the long-run educational and labor market consequences of childhood peers. We examine this question by linking administrative data on elementary school students to subsequent test scores, college attendance and completion, and earnings. To distinguish the effect of peers from confounding factors, we exploit the population variation in the proportion of children from families linked to domestic violence, who were shown by Carrell and Hoekstra (2010, 2012) to disrupt contemporaneous behavior and learning. Results show that exposure to a disruptive peer in classes of 25 during elementary school reduces earnings at age 26 by 3 to 4 percent. We estimate that differential exposure to children linked to domestic violence explains 5 to 6 percent of the rich-poor earnings gap in our data, and that removing one disruptive peer from a classroom for one year would raise the present discounted value of classmates' future earnings by $100,000.
Keywords: peer effects; education; domestic violence; labor market outcomes
JEL Codes: I21; I24; J12; J24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| exposure to a disruptive peer in a class of 25 (C92) | reduction in earnings at age 26 (J17) |
| exposure to a disruptive peer in a class of 25 (C92) | reduction in present discounted value of classmates' future earnings (J17) |
| differential exposure to children linked to domestic violence (J12) | accounts for rich-poor earnings gap (J31) |
| exposure to one additional disruptive student (C92) | reduction in math and reading test scores in grades 9 and 10 (A21) |
| exposure to male peers linked to domestic violence (J12) | larger declines in college degree attainment (D29) |
| exposure to male peers linked to domestic violence (J12) | significant reduction in college enrollment (I23) |