Abstract for:

The Importance of Rank Position

Richard  Murphy,  Felix  Weinhardt,  September 2013
Paper No' CEPDP1241: | Full paper

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Keywords: Rank, non-cognitive skills, peer effects

JEL Classification: I21; J24; D01

Is hard copy/paper copy available? YES - Paper Copy Still In Print.

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This Paper is published under the following series: CEP Discussion Papers

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Abstract:

We find an individual’s rank within their reference group has effects on later objective outcomes. To evaluate the impact of local rank, we use a large administrative dataset tracking over two million students in England from primary through to secondary school. Academic rank within primary school has sizable, robust and significant effects on later achievement in secondary school, conditional on national test scores. Moreover we find boys gain four times more in later test scores from being top compared to girls. We provide evidence for a mechanism using matched survey data, which shows that rank affects an individual’s self-concept. The paper discusses other potential channels but concludes that malleable non-cognitive skills such as confidence and belief in own ability are most likely to generate these results. We put forward a basic model where rank effects costs and effort allocation when faced with multiple tasks. We believe this is the first large-scale study to show large and robust effects of rank position on objective outcomes of that have consequences in the labour market.