Classroom peer effects and academic achievement: Quasi-randomization evidence from South Korea

Endogenous formation of peer groups often plagues studies on peer effects. Exploiting quasi-random assignment of peers to individual students that takes place in middle schools of South Korea, we examine the existence and detailed structure of academic interactions among classroom peers. We find that mean achievement of one's peers is positively correlated with a student's performance (standardized mathematics test score). Employing IV methods, we show that such a relationship is causal: the improvement in peer quality enhances a student's performance. Quantile regressions reveal that weak students interact more closely with other weak students than with strong students; hence their learning can be delayed by the presence of worst-performing peers. In contrast, strong students are found to interact more closely with other strong students; hence their learning can be improved by the presence of best-performing peers. We also examine the implications of these findings for two class formation methods: ability grouping and mixing.