This paper studies how a student’s ordinal rank in a peer group affects performance and specialisation choices in university. By exploiting data with repeated random assignment of students to teaching sections, we find that a higher rank increases performance and the probability of choosing related follow-up courses and majors. We document two types of dynamic effects. First, earlier ranks are less important than later ranks. Second, responses to rank changes are asymmetric: improvements in rank raise performance, while decreases in rank have no effect. Rank effects partially operate through students’ expectations about future grades.
Type of Material
Working Paper
Publisher
University College Dublin. School of Economics
Start Page
1
End Page
54
Series
UCD Centre for Economic Research Working Paper Series