DP16066 Achievement Rank Affects Performance and Major Choices in College

Author(s): Benjamin Elsner, Ingo E. Isphording, Ulf Zölitz
Publication Date: April 2021
Keyword(s): Higher education, peer effects, Rank, Social comparisons
JEL(s): I21, J16, J31
Programme Areas: Labour Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=16066

This paper studies how a student's ordinal rank in a peer group affects performance and specialisation choices in university. By exploiting data with repeated random assignment of students to teaching sections, we find that a higher rank increases performance and the probability of choosing related follow-up courses and majors. We document two types of dynamic effects. First, earlier ranks are less important than later ranks. Second, responses to rank changes are asymmetric: improvements in rank raise performance, while decreases in rank have no effect. Rank effects partially operate through students' expectations about future grades.