Classroom Peer Effects and Academic Achievement: Evidence from a Chinese Middle School

This paper estimates peer effects on student achievement using a panel data set obtained from a middle school in China. Two unique features of the organization of Chinese middle schools (Grades 7 to 9) and the panel data allow us to identify peer effects at classroom level; in particular, we are able to overcome difficulties that have hindered the separation of peer effects from omitted individual factors due to self-selection and from common teacher effects. First, students are assigned to a class at entry of middle school (Grade 7) and stay with their classmates together for all subjects and for all grades in middle school. In other words, any self-selection into a class occurs before the interaction with classmates. Thus, individual fixed effects can capture all omitted student and family characteristics relevant for selection. Second, each teacher of Math, English, and Chinese teaches two classes and stay with the same two classes from Grade 7 to Grade 9. This panel nature allows us to use teacher by test fixed effects to capture the time-varying common teacher effect. We estimate peer effects for Math, English, Chinese, and overall test scores separately. In a linear-in-means model controlling for both individual and teacher-by-test fixed effects, peers are found to have a positive and significant effect on math and overall test scores and a positive but insignificant effect on Chinese test scores, but no effect on English test scores. Additionally, students at the middle of the ability distribution tend to benefit from better peers, whereas students at both ends do not.