Learning About Opportunity: Spillovers of Elite School Admissions in Peru

We study how the admission of a student to an elite secondary school changes the schooling outcomes of younger cohorts in the student's school of origin. The context of the rapid establishment and expansion of a nationwide system of highly selective and free-of-charge secondary schools in Peru allows us to investigate information diffusion with low financial barriers. Using a sharp regression discontinuity design, our analysis shows that the admission of an older schoolmate increases the number of younger students who apply (by 16%) and are admitted (47%) to this elite school system. The effect is concentrated among students whose parents have low education levels. Moreover, admissions of older schoolmates to a selective school gives younger students the opportunity to learn about elite schools, but does not seem to encourage them to improve their learning achievement or provide an advantage in preparing the admission assessments. Our findings show that selective schools can have effects that go beyond their own students and indicate that schoolmates can be an effective channel for increasing the demand from high-achieving, low-income students for high-quality education.