Peer Effects in Math and Science

In this paper, we specify and test a model of how the aggregate skill supply is shaped by institutions and social peer groups. First, we exploit a universal policy reform signaling less importance of advanced math-science in high school. We show how it amplified the fall in skill supply in peer groups with a stronger math-science norm. We also document a gender convergence in math-science skills. This is mainly triggered by boys strongly crowding in the policy reform as they face a higher social cost of not conforming. Second, we analyze the underlying mechanism by estimating causal sibling peer effects in the math-science choice. We exploit quasi-experimental variation stemming from a pre-reform pilot scheme. The pilot induced some older siblings to choose advanced math-science at a lower cost, while not directly affecting the course choices of younger siblings. Therefore, any influences of the pilot scheme on the younger siblings may be attributed to the peer influence of the older sibling. Our results suggest that peer effects among siblings are strongest among closely spaced siblings, in particular brothers. We argue that competition is likely the driving force behind younger siblings conforming to their older siblings' choices.