Conditional gender peer effects?

• We study whether gender peer effects in schools are context-specific.
• A time-changing context—an increase in the use special education—is exploited.
• Special education resources might dampen negative gender peer effects.
• The between-school district variation in dampening effects should be investigated.

The current empirical literature on peer group effects in schools highlights that credible causal peer effects cannot be estimated unless parental sorting is taken into account. Motivated by a small theoretical literature that discusses resource allocations within schools, the present paper highlights that causal peer effects might be conditional on the learning environment in which they occur. By exploiting a rapid change in the level of special education in the Norwegian elementary school in the period 2007–2009, we present indicative empirical evidence that gender peer effects in the Norwegian elementary school are conditional on the level of special education provided.