Does Peer Ability Affect Student Achievement?

Abstract

Empirical analysis of peer effects on student achievement has been open to question because of the difficulties of separating peer effects from other confounding influences. While most econometric attention has been directed at issues of simultaneous determination of peer interactions, this paper argues that issues of omitted and mismeasured variables are likely to be more important. It controls for the most important determinants of achievement that will confound peer estimates by removing student and schoolby-grade fixed effects in addition to observable family and school characteristics. The analysis also addresses the reciprocal nature of peer interactions and the interpretation of estimates based upon models using past achievement as the measure of peer group quality. The results indicate that peer achievement has a positive effect on achievement growth. Moreover, students throughout the school test score distribution appear to benefit from higher achieving schoolmates. On the other hand, the variance in achievement appears to have no systematic effect. Further research is recommended on the effects of peers on other social and economic outcomes, and more classroom level evidence is needed on the impact of ability grouping. (Contains 32 references.) (SM) Reproductions supplied by EDRS are the best that can be made from the original document. Empirical analysis of peer effects on student achievement has been open to question because of the difficulties of separating peer effects from other confounding influences. While most econometric attention has been directed at issues of simultaneous determination of peer interactions, we argue that issues of omitted and mismeasured variables are likely to be more important. We control for the most important determinants of achievement that will confound peer estimates by removing student and school-by-grade fixed effects in addition to observable family and school characteristics. The analysis also addresses the reciprocal nature of peer interactions and the interpretation of estimates based upon models using past achievement as the measure of peer group quality. The results indicate that peer achievement has a positive effect on achievement growth. Moreover, students throughout the school test score distribution appear to benefit from higher achieving schoolmates. On the other hand, the variance in achievement appears to have no systematic effect. Peer group effects have played a prominent role in a number of policy debates including ability tracking, anti-poverty programs in both rural areas and urban ghettos, and school desegregation. In addition, opposition to the growing demand for expanded school choice or the provision of education vouchers often focuses on the importance of peers and potential for greater economic and social isolation of disadvantaged students. At the same time advocates of choice often tout its potential for reducing the impact of neighborhood economic and racial segregation.The role of peers also has entered increasingly into theoretical a...

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