Peer Effects and Social Influence in Post-16 Educational Choice

This paper investigates the impact of peers' ability on an individual's post-compulsory educational choices in terms of whether they select an academic route or a vocational route. In order to overcome the common problems associated with the identification of peer effects, the ability of the primary school peers of secondary school peers, who are not going to the same secondary school, is used as an instrument for secondary school peer group quality. These `peers of peers' did not go to the same primary or secondary school as the individual of interest and so cannot have had any direct impact on them. We examine the impact of peers' average ability as well as their subject-specific ability, and also whether the impact of peers differs by gender, or across the ability distribution, or on an individual's subject choice. Finally, we also allow for peer effects to differ within peer groups, simulating closer friendship ties, and therefore stronger peer effects, between more socio-economically similar individuals. We find that peer group ability strongly affects post-16 educational choices. In particular, having higher ability peers significantly reduces the likelihood that an individual will undertake post-16 vocational/technical education. The magnitude of the peer ability effect is approximately half as large as the own ability effect on the choice of post-compulsory education pathway.