Spillovers in Educational Choice

52 Pages Posted: 14 Jan 2015 Last revised: 6 Mar 2017

Juanna Schrøter Joensen

University of Chicago; Institute for the Study of Labor (IZA)

Helena Skyt Nielsen

University of Aarhus - Department of Economics and Business; IZA Institute of Labor Economics

Date Written: March 3, 2017

Abstract

This paper examines how skills are shaped by social interactions in families. We show that older siblings causally affect younger sibling’s educational choices and early career earnings. We focus on critical course choices in high school and overcome the identification challenges of estimating spillover effects in education by exploiting exogenous variation in choice sets stemming from a pilot program. The pilot induced an essentially random subset of older siblings to choose advanced math-science at a lower cost, while not directly affecting the course choices of younger siblings. We find that younger siblings are 2-3 percentage points more likely to choose math-science if their older sibling unexpectedly could choose math-science at a lower cost. We argue that the main influence of the pilot program on the younger siblings may be attributed to the social influence of the older sibling. Spillovers have a lasting impact on the career outcomes of younger siblings, and they are strongest among closely spaced siblings, in particular brothers. We argue that competition is likely one of the driving forces behind younger siblings conforming to their older siblings’ choices.

Keywords: Social interaction, siblings, high school curriculum, skill formation

JEL Classification: I21, I24, J24

Suggested Citation

Joensen, Juanna Schrøter and Nielsen, Helena Skyt, Spillovers in Educational Choice (March 3, 2017). Available at SSRN: https://ssrn.com/abstract=2548702 or http://dx.doi.org/10.2139/ssrn.2548702

Juanna Schrøter Joensen (Contact Author)

University of Chicago ( email )

1101 East 58th Street
Chicago, IL 60637
United States

Institute for the Study of Labor (IZA) ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Helena Skyt Nielsen

University of Aarhus - Department of Economics and Business ( email )

Fuglesangs Alle 4
Aarhus, 8210
Denmark

HOME PAGE: http://mit.econ.au.dk/vip_htm/hnielsen/

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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