The Impact of College Peers on Academic Performance: Evidence from a Natural Experiment in Chile

First year students at the Pontificia Universidad Católica de Chile, one of the leading Chilean universities, are randomly assigned to their first semester college class groups. This paper takes advantage of this natural experiment in order to robustly estimate the impact of peer characteristics on undergraduate academic performance. The research hypothesis is that being assigned as a freshman to a group with more or less students from a same school, or from a given socioeconomic background, may result in very different patterns of adaptation, potentially impacting academic performance. This paper finds evidence which suggests that, contrary to the results found in most of the existing literature, the average college admission score of first semester classmates not only has no positive impact on the academic performance of undergraduate students, but may actually be negatively affecting their grades. Also, although there are some differences across degrees and secondary school types, in general undergraduate students are more likely to be dismissed, and have lower grades, when they share their first semester college class with a secondary schoolmate. Moreover, students assigned to first semester college classrooms with a higher concentration of classmates who attended the same secondary school(s) generally have significantly lower grades, and are less likely to graduate. Finally, students sharing their first semester college classroom with students from public or subsidized secondary schools are more likely to be dismissed due to poor academic performance. The fact that these peer effects are persistent in time points to the existence of a path dependence pattern, suggesting that this initial period in college is key for student adaptation. These findings have important implications for the design of policies intended to improve the adaptation of freshman college students and the access to higher education, suggesting that students would benefit from targeted first semester college class group assignment policies, as well as from additional transitional aid tailored to their profiles.