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The effect of higher attaining peers on youth custody

The effect of higher attaining peers on youth custody by Veruska Oppedisano, School of Economics, University of Westminster

8th Feb 2022 online

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The paper explores the impact of peer effects on youth custody. We address the two threats to identification, the reflection problem and the non-random formation of peer groups, using an IV strategy based on ‘peers of peers’ ability and leave-out mean aggregate fixed effects. Findings, based on different specifications, show that there is a negative and marginally statistically significant effect of the ability of peers on the probability of ending up in custody. To shed some light on potential mechanisms, we also find that peer ability is positively correlated with individuals’ grades, and negatively correlated with unauthorised absences and permanent exclusion.