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Beyond the Average: Peer Heterogeneity and Intergenerational Transmission of Education

Author

Listed:
  • Chakraborty, Tanika

    (Indian Institute of Management)

  • Nottmeyer, Olga

    (IZA)

  • Schüller, Simone

    (German Youth Institute (DJI))

  • Zimmermann, Klaus F.

    (University of Bonn)

Abstract

Estimating the effect of 'ethnic capital' on human capital investment decisions is complicated by the endogeneity of location choice of immigrants and the reflection problem. We exploit a rare immigrant settlement policy in Germany to identify the causal impact of parental peer-heterogeneity on the educational outcomes of their children. To identify the direction of peer effect we restrict to no-child-adult-peers who completed their education much before the children in our sample of interest. We find that children of low-educated parents benefit significantly from the presence of high-educated neighbors, with more pronounced effects in more polarized neighborhoods and significant gender heterogeneity. In contrast, we do not find any negative influence coming from the low-educated neighbors. Our estimates are robust to a range of flexible peer definitions. Overall, the findings suggest an increase in parental aspirations as the possible mechanism rather than a direct child-to-child peer effect.

Suggested Citation

  • Chakraborty, Tanika & Nottmeyer, Olga & Schüller, Simone & Zimmermann, Klaus F., 2014. "Beyond the Average: Peer Heterogeneity and Intergenerational Transmission of Education," IZA Discussion Papers 8695, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp8695
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    References listed on IDEAS

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    More about this item

    Keywords

    policy experiment; peer effects; immigrant; Germany; ethnic capital; education;
    All these keywords.

    JEL classification:

    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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