Informal social interactions, behavior, and academic achievement

We study the effects of informal social interactions on academic achievement and behavior using idiosyncratic variation in peer groups stemming from changes in bus routes across elementary, middle, and high school. In early grades, a one standard-deviation change in the value-added of same-grade bus peers corresponds to a 0.01 SD change in academic performance and a 0.03 SD change in behavior; by high school, these magnitudes grow to 0.04 SD and 0.06 SD. These findings suggest that student interactions outside the classroom—especially in adolescence—may be an important factor in the education production function.