Educating for Democracy: What Peer Group Assignments Tell Us about the Value of Diversity, Equity and Achievement in U.S. Public Schools

I use a detailed panel data set of North Carolina public elementary school students to assess the relative value of diversity, equity and achievement in U.S. public schools as revealed by classroom peer grouping choices. The allocation of students to classrooms involves substantial tradeoffs. The most equitable grouping (i.e. that which creates the smallest achievement gap) may not be the most efficient (i.e. that which maximizes total achievement), while diversity, as a democratic principle, may be desirable in itself. Understanding the apparent relative valuations can aid policy makers in determining whether the observed peer groupings are optimal. I explicitly model student incentives to analyze how both peer choices and characteristics affect educational achievement. Student accountability policies, which require students to perform above a minimal level in order to be promoted to the next grade, exogenously shift the behavior of the subset of peers who are in danger of failing. This discontinuity separately identifies the effect of peer choices from peer characteristics. I derive equity implications by estimating the distributional effect of increasing peer achievement, particularly allowing for the possibility that students respond to those more similar to themselves in observable dimensions race, gender and achievement.