Peer Effects in Education: a Literature Review

Peer effects are crucial for public policies that aim to modify groups composition, like desegregation policies, school choice or ability tracking. It is therefore necessary to test the existence and the shape of these effects. Recent empirical papers have found significant effects. Their magnitude is more important when they measure behaviour changes or when they are observed at the class level. Moreover, the average observed effects reflects the positive effect of the best pupils and the negative effect of the pupils at the bottom of the distribution. These results show that peer effects must be seriously taken into account in the definition of education policies.