Class Peers as Competitors and Educators: The Consequences of Rank-Based Rewards in US High Schools

Mark Rosenzweig and Bing Xu

No 31135, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper examines the theoretical and empirical consequences of rank-based reward systems in schools in which students’ performance and effort are evaluated relative to their peers. In such environments, classmates act simultaneously as competitors—due to rank-determined rewards—and as educators through peer learning and assistance. Using nationally representative panel survey data from U.S. high schools, combined with administrative information on the location assignments of new refugee student cohorts, we exploit variation in school competition policies and class ability compositions to identify empirically their dual effects on student effort and peer learning. We develop a theoretical tournament model with heterogeneous students who adjust their effort in response to the effort of similar peers and in which students learn from peers. The model predicts that when rewards depend on relative standing, adding higher-ability students to a cohort will reduce both incumbent academic effort and peer assistance, particularly in schools emphasizing rank-based awards, while adding lower-ability students has the opposite effects. Empirical tests of the model confirm these predictions. In schools with strong rank-based reward policies, the addition of stronger peers reduces high-performing incumbent students’ homework time and eliminates the positive spillovers from peer learning observed in less competitive settings. The adverse effects are concentrated among high-ability incumbents, while lower-ability students—who are less likely to win competitive awards—are largely unaffected. The results indicate that performance-based competition undermines cooperative peer learning and reduces student effort and overall academic performance, especially in institutions with high-ability students that explicitly emphasize relative ranking in determining academic recognition.

JEL-codes: I21 I24 J15 (search for similar items in EconPapers)
Date: 2023-04
New Economics Papers: this item is included in nep-edu, nep-gth, nep-mac, nep-sea and nep-ure
Note: ED LS
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.nber.org/papers/w31135.pdf (application/pdf)

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:nbr:nberwo:31135

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w31135

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().