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Peer Effects In Education: When Beliefs Matter, Luca Facchinello

Research Collection School of Economics

Recent literature explains the puzzling finding of zero or negative peer effects in aca- demic achievement assuming that better peers negatively affect beliefs about ability (self-concept), motivation or peer interactions. This paper provides new evidence on such negative mechanisms, and on their impact on educational choices and attainment for students randomly assigned in compulsory school to classes with different cognitive ability. Using detailed longitudinal data on a nationally representative sample of Swedish compulsory school students, I find that students exposed to higher ability peers systematically underestimate their ability and are less likely to choose advanced subjects throughout compulsory school. While …