The Effect of High Achieving Peers Leaving The Class - Evidence From Hungary

1. The Effect of High Achieving Peers Leaving The Class - Evidence From Hungary Mi van akkor, ha a legokosabb gyerekek elmennek az osztályból? A kisgimnáziumi szelekció következményei Fritz Schiltz, Deni Mazrekaj, Daniel Horn, and Kristof De Witte Szirák 09.11.2018 Budapest

2. Overview What happens to „children left behind” when the highest-achieving are cherry-picked by elite schools? We exploit a unique institutional setting, coupled with good data. We contribute to the tracking literature by focusing on potential mechanismsthat change staying-students’ outcomes. Peer effects Schiltz-Mazrekaj-Horn-DeWitte

3. Main results • Instrumenting the percentage of leaving peers suggests 1) moderately negative total effects • especially in math • and aspirations • 2) but heterogeneous effects. • More negative • for girls, and • for the top quartile left behind • in Math, reading, behavior & aspirations • Positive for • the bottom quartile • in Reading, behavior & aspirations Peer effects Schiltz-Mazrekaj-Horn-DeWitte

4. Setup Grade Age 8 14 NABC 8 12 6 10 Data collected in Grade 6 and Grade 8 2008 (2010) – 2015 (2017) Total of 635,713 students Peer effects Schiltz-Mazrekaj-Horn-DeWitte

5. Setup Spatial variance in 6-year-long elite tracks Peer effects Schiltz-Mazrekaj-Horn-DeWitte

6. Setup Spatial variance in 6-year-long elite tracks Peer effects Schiltz-Mazrekaj-Horn-DeWitte

7. Setup Spatial variance in 6-year-long elite tracks Peer effects Schiltz-Mazrekaj-Horn-DeWitte

8. Elite schools for ‚elite’ students Stayers Leavers 49% 52% 19% 48% 52% 26% 1,485 1,657 1,474 1,649 17,105m 7,314m 461,666 26,823 Schiltz-Mazrekaj-Horn-DeWitte Peer effects

9. Identification strategy I (baseline) • Goal: Lookatthe performance of thosewhostayed! • Problem: % of leaverscan be endogenous • betterprimaryschools „produce” betterstudents • more canleave • but less wouldliketoleave • -> sign of bias is unclear • Exogenousvariation: distancefromnearestelitetrack! • medianclassdistance in 6th grade • measured in meterscoveredbybus (Volan) fromhometonearestelitetrack Peer effects Schiltz-Mazrekaj-Horn-DeWitte

10. Identification strategy I Peer effects Schiltz-Mazrekaj-Horn-DeWitte

11. Identification strategy I Spatial immobility in Hungary is low! 90% does not move betweengrade 6 and grade 8 Only 0.5% of students moves to a region with elite schools movers & non-movers equally likely to leave Two out of three movers does not leave school % leavers to elite schools class median distance to nearest elite school (km) Peer effects Schiltz-Mazrekaj-Horn-DeWitte

12. Identification strategy I • Validity of distanceasinstrument • Elite schools 10km further away • 1.5% less leavers (mean=6%) • Robust to alternative specifications • 1. Exclusion • Distance is independent of test scores in grade 6 • 2. Exogeneity • Currentspatialdispersion of elitetracks is independent of individualplace of living (w/ free schoolchoice) Peer effects Schiltz-Mazrekaj-Horn-DeWitte

13. Identification strategy II Panel fixed effect models. Utilize the fact that there is variation in the number /percentage of leavers by school through the years. Problem: unbalanced panel (several schools have no leavers in several years). This is just a robustness check! Peer effects Schiltz-Mazrekaj-Horn-DeWitte

14. Identification strategy II % of observations Number of leavers to elite schools per class Peer effects Schiltz-Mazrekaj-Horn-DeWitte

15. Identification strategy II % of observations in classes where at least 1 student is leaving to elite schools % of leavers to elite schools per class Peer effects Schiltz-Mazrekaj-Horn-DeWitte

16. Results (IV) (when 10% leaves) Controls: Gender, books at home, mother education, score in grade 6, leave-out-means at class level. Regional and cohort FE. SEs clustered at class level. Peer effects Schiltz-Mazrekaj-Horn-DeWitte

17. Results (IV) – alternative outcomes (when 10% leaves)65 – 75 % observed Controls: Gender, books at home, mother education, score in grade 6, leave-out-means at class level. Regional and cohort FE. SEs clustered at class level. Peer effects Schiltz-Mazrekaj-Horn-DeWitte

18. Heterogeneous effects Gender Same effect by leavers’ gender More negative effects for staying girls Socio-economic background (~quartiles) More negative effects for high SES Positive effects for low SES: Reading Behavior Aspirations Peer effects Schiltz-Mazrekaj-Horn-DeWitte

19. Identification strategy II (cohort variation) Effect by ability and gender Peer effects Schiltz-Mazrekaj-Horn-DeWitte

20. Mechanism • Competition • Q1 competedwithleft-students -> lack of incentives • 2. Increased/depletedconfidence • Q1 triedbut failed • Q4 increased in relativeability • 3. Teachingtothemean? • More timefor Q4? Peer effects Schiltz-Mazrekaj-Horn-DeWitte

21. Conclusion Positive effects: Lowest ability students Reading, behavior & aspirations Negative effects: Girls, high ability/high SES Math, reading, behavior & aspirations Policy relevance This is effect of small changes in composition Positive effect for leavers Peer effects Schiltz-Mazrekaj-Horn-DeWitte

22. Thank you for the attention Daniel Horn Horn.Daniel@krtk.mta.hu 09.11.2018 Szirák

23. Instrument robust to alternative specifications Peer effects Schiltz-Mazrekaj-Horn-DeWitte

24. Results robust to alternative instruments Peer effects Schiltz-Mazrekaj-Horn-DeWitte

25. Results robust to alternative specifications Peer effects Schiltz-Mazrekaj-Horn-DeWitte