Gustavo Bobonis ECO4060

1. Comments on:“Network Effects and the Educational Attainment of Young Immigrants”by Florian Hoffmann Gustavo Bobonis ECO4060

2. Summary • Question: Are there neighborhood-based peer effects for immigrants • Interesting question: concern with rate of assimilation (Huntington, 2004; McKinnon and Parent, 2005) • Contribution: ID strategy that improves upon BLM to control for OVB • Group-region-cohort variation • Results: modest network effects • Moving from a location with no ‘peers’ to the average relative ‘share’ of peers increases individuals’ school attainment by 0.11-0.23 years (= α*3.06*12.4) • Distinction from previous literature: evidence of selection (movers vs. non-movers) • My comments: empirical framework, data & samples, potential threats to validity, discussion of results

3. Empirical Framework and Lit Review • Manski (1993) – “The Reflection Problem” • Simultaneity problem: person A’s actions affect person B’s actions and vice versa. • Distinct from: • Correlated unobservables (e.g., common environmental shocks) • Endogenous group membership (e.g., selection into networks) • Endogenous and exogenous interactions cannot be identified, but can identify evidence of some type of peer or network effect • How to interpret BLM-model network effect α? • Reference: Moffitt (2001) – ID best-response function • Experimentally altering group membership • Partial population experiments – portion of individuals within a group are directly treated

4. Data, Samples, and Reference Groups • Immigrants who speak their mother tongue at home • Mother tongue is important determinant of ethnic identity (Alba, 1990) • Endogenous? Sample selection based on an action affected by network effects (“pressures to conform or to distinguish oneself”)? • Recommendation: Use sample of all immigrants & use indicator for non-English language spoken at home as dep. variable. ‘Network’ effect on language use? • Immigrants who arrived when young or U.S. born (2nd/3rd generation?) • U.S. born (2nd or 3rd generation) might have different reference groups • Recommendation: Use only 1st generation immigrants? • Density and ‘quality’ of other groups do not affect schooling decision? • e.g., “conformity” or “need of differentiation” from natives/other migrants? • May bias estimates of α? Depends on: Cov(cajk, cal,k) <, >, or = 0, for each l ≠ j αl network effect of other groups * Group all Spanish-speakers and French-speakers together?

5. Potential Threats to Validity • Focus on “group-region-cohort” variation ID strategy: • What are some of the main identifying assumptions? Examples: • μjt = 0 (no shocks to MSAs that affect own and peers’ school attainment or migration into or out of MSA; e.g., MSA ‘business or political cycles’) • μkt = 0 (no shocks to language groups that affect own and peers’ school attainment; e.g., changes in group-specific tastes) You can include both μjt and μkt fixed effects. • μjkt = 0 (no shocks to environment of language groups in particular MSAs that affect own and peers’ school attainment) Example: political economy-based hypothesis • Individuals in language groups with relatively high share of population and (high or low) education levels demand more access to or quality of public schools • Affects both own and peer school achievement? • Mechanism may be more important for high school • Interpretation of reduced-form coefficient, might include a school quality mechanism

6. Discussion of Results • How do we know whether α is ‘economically’ (or sociologically?) significant? • One std. deviation increase in cajk for a given mean school attainment level? • Compare to previous estimates of network effects? • Main estimates of α from group-region-cohort variation (Table 7): • Are stable around: [0.002 (0.002) – 0.006 (0.003)] • Probably cannot reject that they’re significantly different • Effect for non-movers is 0.003 (0.002) (less selection for this group?) • Parental background variable subgroup: • Estimate is -0.004 (0.003) • But, parental background for sub-sample of individuals living with parents. Self-selected sample? • What is main network effect estimate for sub-sample when you exclude parental background control?