Peer Effects and Rank Concerns in the Classroom

I examine how disruptions to students’ environments propagate to their classmates to understand mechanisms behind classroom peer interactions. I combine Chilean administrative and survey data with housing-damage measures from one of history’s strongest earthquakes. Damage to a student’s home lowered achievement and raised self-reported study effort cost. Classmates’ average damage induced schools to reallocate resources toward student support and increased achievement. In contrast, dispersion in classmates’ damage had heterogeneous achievement effects that schools did not appear to mitigate, pointing to peer interactions. Motivated by evidence suggesting students value classroom rank, I show that a game-of-status model of grade competition rationalizes the findings. The results suggest that, beyond production complementarities and conformity, a desire to compete could shape peer effects on learning.