Peer group effects in education production: Is it about congestion?

This paper provides empirical evidence that the achievement growth of lower secondary school students is negatively affected by the presence of classmates from dissolved families. The results, which come from the lower secondary school in Norway, do not seem to reflect non-random allocations of parents, students, or teachers across classrooms. The purpose of the subsequent analyses is to shed light on the underlying mechanisms: is the revealed peer group effect mediated through congestion a la Lazear [Lazear, E.P., 2001. Education production. Quarterly Journal of Economics 116, 777–803]? No decisive evidence is provided, but there are some indications that congestion may be part of the explanation.