The Long-Term Impacts of Mixing the Rich and Poor: Evidence from Conscript Dorms

Elias Einiö

American Economic Journal: Applied Economics, 2026, vol. 18, issue 2, 177-209

Abstract: To what extent is economic success determined by with whom individuals interact socially? We tackle this question by exploiting a large-scale natural experiment in the Finnish conscription. Our research design is based on the alphabetization of dorms, which is shown to induce as good as random variation in peer composition. Dormmates from high-income families have a positive impact on earnings, with the largest effect among individuals from high-income families. For them, a one standard deviation increase in dormmates' parental income increases long-term earnings by 5.7 percent. The results support labor market networks among the rich as the key mechanism.

JEL-codes: D12 D31 G51 I32 J31 J45 (search for similar items in EconPapers)
Date: 2026
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.aeaweb.org/doi/10.1257/app.20240173 (application/pdf)
https://doi.org/10.3886/E214741V1 (text/html)
https://www.aeaweb.org/articles/materials/24802 (application/pdf)
https://www.aeaweb.org/articles/materials/24803 (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aejapp:v:18:y:2026:i:2:p:177-209

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

DOI: 10.1257/app.20240173

Access Statistics for this article

American Economic Journal: Applied Economics is currently edited by Alexandre Mas

More articles in American Economic Journal: Applied Economics from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().