TY  - JOUR
AU  - Giorgi,Giacomo De
AU  - Pellizzari,Michele
AU  - Redaelli,Silvia
TI  - Be as Careful of the Company You Keep as of the Books You Read: Peer Effects in Education and on the Labor Market
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 14948
PY  - 2009
Y2  - May 2009
UR  - http://www.nber.org/papers/w14948
L1  - http://www.nber.org/papers/w14948.pdf
N1  - Author contact info:
Giacomo De Giorgi
Department of Economics
Stanford University
579 Serra Mall
Stanford, CA 94305
Tel: 650/723-3982
E-Mail: degiorgi@stanford.edu

Michele Pellizzari
Bocconi University
Department of Economics and IGIER
via Roentgen 1
20136 - Milan - Italy
E-Mail: michele.pellizzari@unibocconi.it

Silvia Redaelli
1818 H Street, NW
Washington, DC 20433 USA
E-Mail: sredaelli@worldbank.org
AB  - In this paper we investigate whether peers' behavior influences the choice of college major, thus contributing to the mismatch of skills in the labor market. Using a newly constructed dataset, we are able to identify the endogenous effect of peers on such decisions through a novel identification strategy that solves the common econometric problems of studies of social interactions. Results show that, indeed, one is more likely to choose a major when many of her peers make the same choice. We also provide evidence on skills mismatch in terms of entry wages and occupation. We find that peers can divert students from majors in which they have a relative ability advantage, with adverse consequences on academic performance, entry wages and job satisfaction.
ER  -