Peer Effects and Pupil Attainment: Evidence from Secondary School Transition

It is a common belief that children will thrive if educated amongst better class and schoolmates. It is a belief that guides many parents in their choice of school, and has important implications for policy on school choice and organisation. Many studies have tried to measure this 'peer-group' effect, but the enterprise is plagued by conceptual and empirical difficulties. In this study, we use the population of state Secondary school pupils in England to tease out how pupil attainments at age 14 respond to differences in the prior, age-11 attainments of their current school grade peer-group. Data on home addresses and school attendance allow us to compare outcomes of children who live in the same street, or who attended the same Primary school up to age 11, but then move on to different Secondary schools with different peer-group quality. These 'peer-group' effects seem to exist, but they are small in magnitude - a 1 s.d. increase in peer-group prior attainments allows a pupil to improve their own score by barely 0.08 of a standard deviation. We tackle various gnarly empirical problems arising in regression models of pupil attainments that incorporate individual and group prior attainments as explanatory variables. Estimates from such models are seriously biased by transient components in prior pupil attainments, correlation between current and prior peer-group characteristics and by ability sorting into Secondary schooling. We address these issues by using teachers predictions as instruments for prior attainments, defining a pupil's current peer-group in terms of those school mates with whom he or she has had no contact in the past, and by predicting current peer-group attainments with the productivity of their origin Primary schools, measured by the gain in attainments of different cohorts between ages 7 and 11.