Steven Proud
The magnitude and characteristics of the effect of a child’s peers on their outcomes has long interested researchers and policy makers. In this paper, I take advantage of the correlation between the average outcomes a child’s peer group attains with the distribution of ages within the cohort to construct an instrument for the ability of the peer group in order to estimate the peers effects on children’s outcomes at age 11. IV results suggest there is a significant positive effect of a more able peer group. Furthermore, the results suggest that there is more benefit for children who are close to the ability of the peer group than those whose ability is not close.
