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Heterogeneous peer effects under endogenous selection: An application to local and migrant children in elementary schools in Shanghai

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  • Chen, Yuanyuan
  • Feng, Shuaizhang
  • Yang, Chao

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. 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, and show that peer effect can be substantially more important than the school effect.

Suggested Citation

  • Chen, Yuanyuan & Feng, Shuaizhang & Yang, Chao, 2024. "Heterogeneous peer effects under endogenous selection: An application to local and migrant children in elementary schools in Shanghai," China Economic Review, Elsevier, vol. 87(C).
    • Handle: RePEc:eee:chieco:v:87:y:2024:i:c:s1043951x24000968
    DOI: 10.1016/j.chieco.2024.102207
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    1. Dai, Chaonuo & Zhou, Yuzhi, 2025. "Rank, peer achievement, and shadow education: Evidence from secondary school students in China," Economics of Education Review, Elsevier, vol. 108(C).

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    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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