The Effect of Classmate Characteristics on Individual Outcomes: Evidence from the Add Health

We use data from the National Longitudinal Study of Adolescent Health (Add Health) to examine the effects of classmate characteristics on economic and social outcomes of students. The unique structure of the Add Health allows us to estimate these effects using comparisons across cohorts within schools, and to examine a wider range of outcomes than other studies that have used this identification strategy. This strategy yields variation in cohort composition that is uncorrelated with student observables suggesting that our estimates are not biased by the selection of students into schools or grades based on classmate characteristics. We find that increases in the percent of classmates whose mother is college educated has significant, desirable effects on educational attainment and substance use. We find no evidence that in-school achievement, student attitudes, or behaviors serve as mechanisms for this effect. The percent of students from disadvantaged minority groups does not show any negative effects on the post-secondary outcomes we examine, but is associated with students reporting less caring student-teacher relationships and increased prevalence of some undesirable student behaviors during high school.