The Effect of Classmate Characteristics on Individual Outcomes: Evidence from the Add Health

We use data from the National Longitudinal Study of Adolescent Health (Add Health) to examine the effects of classmate characteristics on economic and social outcomes of students. The unique structure of the Add Health allows us to estimate these effects using comparisons across cohorts within schools, and to examine a wider range of outcomes than other studies that have used this identification strategy. We find that increases in the percent of classmates whose mother is college educated has significant, desirable effects on educational attainment and substance use. We do not find much evidence that the percent of classmates who are black or Hispanic has negative effects on individual outcomes, on average, but increases in the percent black or Hispanic does increase drop out rates among black students. Journal of Economic Literature Classification: I21, I19, J13, J15