Can higher-achieving peers explain the benefits to attending selective schools? Evidence from Trinidad and Tobago

Using exogenous secondary school assignments to remove self-selection bias to schools and peers within schools, I credibly estimate both (1) the effect of attending schools with higher-achieving peers, and (2) the direct effect of short-run peer quality improvements within schools, on the same population. While students at schools with higher-achieving peers have better academic achievement, within-school short-run increases in peer achievement improve outcomes only at high-achievement schools. Short-run (direct) peer quality accounts for only one tenth of school value-added on average, but at least one-third among the most selective schools. There are large and important differences by gender.