Abstract:

This paper uses data from the Longitudinal Study of Young People in England (LSYPE) to investigate how the educational aspirations of secondary school pupils in Year 9 (at age 14) and in Year 11 (at age 16) are influenced by their school peers. Educational aspirations are defined as plans to stay in education after completing compulsory schooling and, conditional on staying, intentions to follow an academic rather than a vocational post-compulsory path- way. In order to overcome the endogeneity and selection biases associated with peer effects, the study adopts an identification strategy based on ‘peers-of-peers’. Specifically, each individual’s secondary school peers are instrumented with their primary school peers who did not attend the same primary or secondary school as the individual. These peers-of-peers will have affected the secondary school peers through attendance at the same primary school, but have likely never met the individual and therefore will not have had any direct effect on the individual’s aspirations. The paper assesses peer effects in three different ways: through peers’ ability (as measured by their educational achievements); through peers’ socioeconomic background; and through peers’ own aspirations. Peer effects on individuals’ intentions to stay in education are found to be significant for boys but not for girls. Conditional on their plans to remain in post-compulsory education, peers’ ability, socioeconomic background and aspirations to follow an academic rather than a vocational education pathway, all have a positive and significant effect on individuals’ aspirations to follow an academic route. We also find evidence that the provision of information, advice and guidance (IAG) by schools or external agencies can serve to mitigate peer effects. Finally, individuals with higher ability and more socially-advantaged peers are less likely to have changed their educational aspirations between Year 9 and Year 11 of schooling.