Identifying peer achievement spillovers : implications for desegregation and the achievement gap

This paper develops a new approach to identifying peer achievement spillovers in the context of an equilibrium model of student effort choices. By focusing on the effect of contemporaneous peer achievement, this framework integrates previously unexplored types of heterogeneity in peer spillovers in the achievement production context. Applying the strategy to North Carolina public elementary school students, I find peer achievement spillovers exist primarily within race-based reference groups, and the magnitude of these spillovers diminishes across the percentiles of the achievement distribution. Simulations highlight the importance of peer achievement spillovers for determining the distributional effects of esegregation relative to flexible reduced-form specifications that focus entirely on predetermined peer characteristics.