Do peers influence children's skill development in preschool?

Currently, a disjuncture exists between the economic literature on young children's outcomes from early education or child care and the literature on schooling outcomes of older children and adolescents. Peer effects have been found to be both theoretically important and empirically significant in school settings, yet the effects of peers have not been incorporated into research estimating the child development production function. In this study, we estimate the value-added effects of peer abilities on the educational outcomes of a probability sample of four year olds who attended Head Start, publicly subsidized pre-kindergarten, or private preschool in Georgia. We use a longitudinal data set that includes measures of preschool quality, child and family characteristics, peer abilities, and assessments of the skills of pre-kindergarteners both before and after attending preschool. The ability level of the peers in a child's classroom has direct and positive effects on the child's cognitive skills, pre-reading skills, and expressive language skills after controlling for preschool resources, family characteristics, and the child's skills at the beginning of preschool. Neither time spent on discipline, nor contextual effects of classroom composition, nor teachers’ motivation appear to be the mechanisms that explain the influences of peers on children's skill development.