A Big Fish in a Small Pond: Ability Rank and Human Capital Investment

Benjamin Elsner and Ingo Isphording

No 9121, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We study the impact of a student's ordinal rank in a high school cohort on educational attainment several years later. To identify a causal effect, we compare multiple cohorts within the same school, exploiting idiosyncratic variation in cohort composition. We find that a student's ordinal rank significantly affects educational outcomes later in life. If two students with the same ability have a different rank in their respective cohort, the higher-ranked student is significantly more likely to finish high school, attend college, and complete a 4-year college degree. These results suggest that low-ranked students under-invest in their human capital even if they have a high ability compared to most students of the same age. Exploring potential channels, we find that students with a higher rank have higher expectations about their future career, a higher perceived intelligence, and receive more support from their teachers.

Keywords: ordinal rank; peer effects; educational attainment; human capital (search for similar items in EconPapers)
JEL-codes: I21 I23 J24 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2015-06
New Economics Papers: this item is included in nep-edu, nep-hrm, nep-lma and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

Published - published in: Journal of Labor Economics, 2017, 35(3), 787-828

Downloads: (external link)
https://docs.iza.org/dp9121.pdf (application/pdf)

Related works:
Journal Article: A Big Fish in a Small Pond: Ability Rank and Human Capital Investment (2017)
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:iza:izadps:dp9121

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().