The Long-run Effects of Peers on Mental Health
with Jonathan Norris
This paper studies how peers in school affect students’ mental health. Guided by a theoretical framework, we find that increasing students’ relative ranks in their cohorts by one standard deviation improves their mental health by 6% of a standard deviation conditional on own ability. These effects are more pronounced for low-ability students, persistent for at least 14 years, and carry over to economic long-run outcomes. Moreover, we document a strong asymmetry: Students who receive negative rather than positive shocks react more strongly. Our findings therefore provide evidence on how the school environment can have long-lasting consequences for the well-being of individuals.
Self-selection of Peers and Performance
In many natural environments, carefully chosen peers influence individual behavior. Using a framed field experiment at secondary schools, we examine how self-selected peers affect performance in contrast to randomly assigned ones. We find that self-selection improves performance by approximately 16-19% of a standard deviation relative to randomly assigned peers. Our results document peer effects in multiple characteristics and show that self-selection changes these characteristics. However, a decomposition reveals that variations in the peer composition contribute only little to the estimated average treatment effects. Rather, we find that self-selection has a direct effect on performance.
Determinants of Peer Selection
Peers influence behavior in many domains. We study whom individuals choose as peers and explore individual determinants of peer selection. Using data from a framed field experiment at secondary schools, we analyze how peer choices depend on relative performance, personality differences, and the presence of friendship ties. Our results document systematic patterns of peer choice: friendship is the most important determinant, albeit not the only one. Individuals exhibit homophily in personality and, on average, prefer similar peers who perform slightly better. Our results help to rationalize models of differential and nonlinear peer effects and to understand reference group formation.
Understanding Parental Decision-making: Beliefs about Returns to Parenting Styles and Neighborhoods
I study parental beliefs about the returns to two factors affecting the development and long-term outcomes of children: (i) parenting styles defined by the extent of warmth and control parents employ in raising children, and (ii) neighborhood quality. Based on a representative sample of 2,119 parents in the United States, I show that parents perceive large returns to the warmth dimension of parenting as well as neighborhoods, and document that perceived returns to parenting depend on the neighborhood a family is living in. Mothers expect larger returns than fathers, but there is no socioeconomic gradient in perceived returns. I introduce a measurement error correction by leveraging beliefs measured in two different domains, and show that parents' perceived returns relate to their actual parenting styles. I conclude that parental beliefs are an important determinant of parental decision-making, but cannot explain socioeconomic differences in parenting.
Gender Differences in Wage Expectations: Sorting, Children, and Negotiation Styles
This paper presents evidence from a large-scale study on gender differences in expected wages before labor market entry. Based on data for over 15,000 students, we document a significant and large gender gap in wage expectations that closely resembles actual wage differences, prevails across subgroups, and along the entire distribution. To understand the underlying causes and determinants, we relate expected wages to sorting into majors, industries, and occupations, child-rearing plans, perceived and actual ability, personality, perceived discrimination, and negotiation styles. Our findings indicate that sorting and negotiation styles affect the gender gap in wage expectations much more than prospective child-related labor force interruptions. Given the importance of wage expectations for labor market decisions, household bargaining, and wage setting, our results provide an explanation for persistent gender inequalities.