Economic Theory and Education

Peer Effects and Comparative Advantage




Does being grouped in a class with higher-achieving students lead to more learning?


Economists and other social scientists have long been interested in measuring "peer effects" – how individual behavior is affected by one's peer group. In this paper, we take a well-known model from labor economics that makes predictions about how workers sort into different jobs. The key principle is that job assignments are based on comparative advantage. If there's a shortage of teachers...

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