Peer Effects and Rank Concerns in the Classroom

I examine how disruptions to students' environments propagate to their classmates to understand the mechanisms behind peer interactions in the classroom. I combine administrative and survey data from Chile with detailed measures of housing damages from the 2010 earthquake, one of the most violent ever recorded. Damages to a student's own home reduced achievement and raised self-reported cost of study effort. Average damages among classmates induced schools to reallocate resources towards student support and increased achievement. In contrast, dispersion in classmates' damages had heterogeneous achievement effects across the prior performance distribution, which 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 competition for grades rationalizes the findings. The results suggest that, beyond production complementarities and a desire to conform, a desire to compete could shape peer effects on learning.