Reputation and School Competition

W. Bentley Macleod () and Miguel Urquiola

American Economic Review, 2015, vol. 105, issue 11, 3471-88

Abstract: Stratification is a distinctive feature of competitive education markets that can be explained by a preference for good peers. Learning externalities can lead students to care about the ability of their peers, resulting in across-school sorting by ability. This paper shows that a preference for good peers, and therefore stratification, can also emerge endogenously from reputational concerns that arise when graduates use their college of origin to signal their ability. Reputational concerns can also explain puzzling observed trends including the increase in student investment into admissions exam preparation, and the decline in study time at college. (JEL I21, I23, I26, J24)

JEL-codes: I21 I23 I26 J24 (search for similar items in EconPapers)
Date: 2015
Note: DOI: 10.1257/aer.20130332
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Citations: View citations in EconPapers (48)

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