Classroom or Pub – Where are Persistent Peer Relationships between University Students Formed?

Abstract

This paper discusses the formation of peers in higher education using a unique data set of industrial engineering students. For identification, we exploit the random assignment of students into groups and student performance before students met. We compare two different settings for potential peer formation: a voluntary freshman orientation week organized by the students' union and a mandatory group work course. It is only in the case of the group work course that we report persistent impacts on subsequent academic achievement. In line with our theoretical reasoning, peer effects exist between groups of two students who were already similar before.

Keywords: peer effects, higher education, social network formation, homophily

JEL Classification: I21, I23, D85