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Be As Careful Of The Company You Keep As Of The Books You Read. Peer Effects In Education And On The Labor Market

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  • Giacomo DeGiorgi

    (Department of Economics, Stanford University)

Abstract

In this paper we present a novel identification strategy for the analysis of social interactions and we shed light on the effect of peer behavior in the choice of college major. Using a newly constructed dataset, we are able to identify the endogenous effect of peers on such decisions. Results show that, indeed, students are more likely to choose a major when many of thier peers make the same choice. We also provide evidence on skills mismatch, entry wages and occupation. Peer effects are found to be strong enough to divert students from majors in which they have a relative ability advantage. When this happens, students have worse academic performances, earn lower entry wages and are more likely to end up in a job that does not match their skills and expectations. Creation Date: 2008-08 Revision Date:

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  • Giacomo DeGiorgi, "undated". "Be As Careful Of The Company You Keep As Of The Books You Read. Peer Effects In Education And On The Labor Market," Discussion Papers 07-054, Stanford Institute for Economic Policy Research.
    • Handle: RePEc:sip:dpaper:07-054
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    Cited by:

    1. Li, Tao & Han, Li & Zhang, Linxiu & Rozelle, Scott, 2014. "Encouraging classroom peer interactions: Evidence from Chinese migrant schools," Journal of Public Economics, Elsevier, vol. 111(C), pages 29-45.
    2. Stephen L. Ross & Zhentao Shi, 2022. "Measuring Social Interaction Effects When Instruments Are Weak," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 40(3), pages 995-1006, June.
    3. Stephen L. Ross, 2009. "Social Interactions within Cities: Neighborhood Environments and Peer Relationships," Working papers 2009-31, University of Connecticut, Department of Economics.
    4. Lionel Perini, 2012. "Peer effects and school design: An analysis of efficiency and equity," IRENE Working Papers 12-01, IRENE Institute of Economic Research.
    5. ÖZGÜR, Onur & BISIN, Alberto, 2011. "Dynamic Linear Economies with Social Interactions," Cahiers de recherche 04-2011, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
    6. Victor Lavy & Olmo Silva & Felix Weinhardt, 2012. "The Good, the Bad, and the Average: Evidence on Ability Peer Effects in Schools," Journal of Labor Economics, University of Chicago Press, vol. 30(2), pages 367-414.
    7. Andy Dickerson & Konstantina Maragkou & Steven McIntosh, 2018. "The causal effect of secondary school peers on educational aspirations," CVER Research Papers 017, Centre for Vocational Education Research.
    8. Victor Lavy & Olmo Silva & Felix Weinhardt, 2009. "The Good, the Bad and the Average: Evidence on the Scale and Nature of Ability Peer Effects in Schools," NBER Working Papers 15600, National Bureau of Economic Research, Inc.
    9. Moriarty, John & McVicar, Duncan & Higgins, Kathryn, 2016. "Cross-section and panel estimates of peer effects in early adolescent cannabis use: With a little help from my ‘friends once removed’," Social Science & Medicine, Elsevier, vol. 163(C), pages 37-44.
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    11. Borghans, By Lex & Diris, Ron & Smits, Wendy & de Vries, Jannes, 2020. "Should we sort it out later? The effect of tracking age on long-run outcomes," Economics of Education Review, Elsevier, vol. 75(C).

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    More about this item

    Keywords

    Social interactions; peer effects; identi?cation; mismatch;
    All these keywords.

    JEL classification:

    • J0 - Labor and Demographic Economics - - General
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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