Social policy gone bad educationally: unintended peer effects from transferred students

Christos Genakos and Eleni Kyrkopoulou

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: What is the impact of an increase of lower-ability students in a university class? We examine a natural experiment in which students from large, low-income families had the chance to transfer to academic programs at a local university. Multiple law changes meant that there was significant, quasi-random variability in the number of transferred students over time, which was orthogonal to the quality of receiving students. We create a novel dataset for the top economics department in Greece and show that the social policy had a negative educational impact by uniformly lowering recipient students' academic performance once the proportion of transferred students exceeded a certain threshold.

Keywords: externalities; peer effects; unintended consequences; university education (search for similar items in EconPapers)
JEL-codes: H52 I20 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2026-03-31
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Published in Journal of Policy Modeling, 31, March, 2026, 48(2), pp. 398 - 428. ISSN: 0161-8938

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:137495

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