Class Rank and Sibling Spillover Effects (Job-Market Paper)

Siblings are perhaps the most important childhood peers, yet we know little about sibling spillover effects on school achievement and their potential mechanisms. I estimate the effect of children’s rank in primary school on their younger sibling’s schooling outcomes using administrative records from the Netherlands. In this setting, variation in sibling rank is credibly exogenous and isolates sibling spillovers driven by behavioral and psychological mechanisms, as opposed to direct transmission of human capital. A 1SD increase in child rank in test scores increases their younger sibling’s test scores by 4.3 percent of a standard deviation, showing that behavioral mechanisms in sibling spillovers are empirically relevant. Child rank also increases the chance that their sibling is recommended for the academic school track by 5 percent, even after accounting for younger sibling’s test scores. This recommendation is given exclusively by teachers, suggesting that teachers track children based on arguably meaningless information on their siblings. I argue that this is a form of teacher bias in expectation formation and show that it only occurs for non-migrant children. This points towards cultural proximity as an important factor in the formation of biased expectations, widening achievement gaps between migrant and non-migrant children. Overall, my findings show that school inputs can be important drivers of within-family human capital spillovers.

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