The Long-Run and Dynamic Consequences of High School Ranking

Abstract: 

Ranking of performance plays an important role in educational attainment. We consider data from a cohort of High-School students in Chile and track them from age-14 all the way through to making choices about higher education and indeed sitting national college entry exams (PSU). To deal with endogeneity of non-random assignment to classes we propose a novel instrument. We estimate the impact of high-school ranking, conditional on ability, on short-term and long-term educational outcomes and decisions. We look at subject specialization in High-School and College, Performance in College Entry Exams, and Enrolling in College. Additionally, we look at the dynamic effects of rank (within-person changes in rank). We find positive effects of raking of later outcomes, although peer effects are also important. Within/between class effects suggests peer effects may be larger than rank effects.