Little is known about the impact of peer personality on human capital formation. This paper studies the peer effect of persistence, a personality trait that reflects perseverance when facing challenges and setbacks, on student achievement. Exploiting student-classroom random assignments in middle schools in China, I find having more persistent peers improves in student achievement. The effects are prominent in students with high and medium baseline persistence. I find three mechanisms: (i) students’ own persistence and self-disciplined behaviors increase; (ii) teachers become more responsible/patient and spend more time on teaching preparation; and (iii) endogenous friendship networks consisting of more academically successful peers and fewer disruptive peers develop, particularly among students who share with similar levels of persistence.
Peer effect; Personality trait; Human capital; Friendship formation
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