Reputation and school competition

W. Bentley MacLeod, Miguel Urquiola

Research output: Contribution to journalReview articlepeer-review

56 Scopus citations

Abstract

Stratification is a distinctive feature of competitive education markets that can be explained by a preference for good peers. Learning externalities can lead students to care about the ability of their peers, resulting in across-school sorting by ability. This paper shows that a preference for good peers, and therefore stratification, can also emerge endogenously from reputational concerns that arise when graduates use their college of origin to signal their ability. Reputational concerns can also explain puzzling observed trends including the increase in student investment into admissions exam preparation, and the decline in study time at college.

Original languageEnglish (US)
Pages (from-to)3471-3488
Number of pages18
JournalAmerican Economic Review
Volume105
Issue number11
DOIs
StatePublished - Nov 2015
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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