School Reassignment And The Structure Of Peer Effects

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Abstract

In the last and current decade, the Wake County school district reassigned numerous students to schools, moving up to five percent of the enrolled population in any given year. Before 2000, the explicit goal was balancing schools ' racial composition; after 2000, it was balancing schools' income composition. Throughout, finding space for the area's rapidly expanding student population was the most important concern. The reassignments generate a very large number of natural experiments in which students experience new peers in the classroom. Using panel data on students before and after they experience policy-induced changes in peers, we explore which models of peer effects explain the data. We also review common models and econometric identification of peer effects. Our results reject the popular linear-in-means and single-crossing models as stand-alone models of peer effects. We find support for the Boutique and Focus models of peer effects, as well as for a monotonicity property by which a higher achieving peer is better for a student's own achievement all else equal. Our results indicate that, when we properly account for the effects of peers ' achievement, peers ' race, ethnicity, income, and parental education have no or at most very slight effects. We compute that switching from race-based to incomebased desegregation has at most very slight effects, so that Wake County's numerous

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