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A Big Fish in a Small Pond: Ability Rank and Human Capital Investment

Benjamin Elsner; Ingo E. Isphording

IZA - Institute of Labor Economics

Journal of Labor Economics 2017

We study the impact of a student’s ordinal rank in a high school cohort on educational attainment several years later. To identify a causal effect, we compare multiple cohorts within the same school, exploiting idiosyncratic variation in cohort composition. We find that a student’s ordinal rank significantly affects educational outcomes later in life. Students with a higher rank are significantly more likely to finish high school and to attend college. Exploring potential channels, we find that students with a higher rank have higher expectations about their future career, as well as a higher perceived intelligence.

DOI
10.1086/690714
Volume
35 (3)
Pages
787-828
Language
en
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