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Heterogeneous Peer Effects under Endogenous Selection: An Application to Local and Migrant Children in Elementary Schools in Shanghai

Author

Listed:
  • Chen, Yuanyuan

    (Shanghai University of Finance and Economics)

  • Feng, Shuaizhang

    (Shanghai University of Finance and Economics)

  • Yang, Chao

    (Shanghai University of Finance and Economics)

Abstract

This paper develops a model that allows for heterogenous contemporaneous peer effects among different types of agents who are endogenously selected into different peer groups. Using our framework, we characterize the reduced-form coefficient in the peer effect literature and show that it is a priori ambiguous in sign. We apply our approach to migrant and local students in Shanghai, where local students all go to public schools, but migrant students are endogenously selected into either public schools or lower-quality private schools. The results suggest large contemporaneous peer effects among all student groups. We conduct policy experiments to examine the effect of transferring migrant students from private schools to public schools. We show that peer effect can be substantially more important than the school effect in accounting for the total treatment effect of moving to better schools.

Suggested Citation

  • Chen, Yuanyuan & Feng, Shuaizhang & Yang, Chao, 2022. "Heterogeneous Peer Effects under Endogenous Selection: An Application to Local and Migrant Children in Elementary Schools in Shanghai," IZA Discussion Papers 15070, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp15070
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    References listed on IDEAS

    as
    1. Epple, Dennis & Romano, Richard E, 1998. "Competition between Private and Public Schools, Vouchers, and Peer-Group Effects," American Economic Review, American Economic Association, vol. 88(1), pages 33-62, March.
    2. Antoni Calvó-Armengol & Eleonora Patacchini & Yves Zenou, 2009. "Peer Effects and Social Networks in Education," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 76(4), pages 1239-1267.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    peer effects; sample selection; education; migrant children;
    All these keywords.

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • C34 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Truncated and Censored Models; Switching Regression Models
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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