Peers' parents and educational attainment: The exposure effect

This paper discusses the 'exposure effect' in child development by investigating the extent to which the educational background of peers' parents is related to a child's future college attainment. I analyze the friendship networks of a nationally representative sample of high-school students in the US. To address endogenous friendship formation, I adopt two distinct strategies: a selection correction approach and exploiting within-school cohort variations in parental compositions. I find that peers' academic performance and other observed characteristics, with a rich set of control variables and network fixed effect, do not fully explain the spillover from peers' parents of the same gender. Effects are more prominent for students with a disadvantaged background - less-educated parents, single-mother households, and less caring fathers. Suggestive evidence is provided to support the role model effect as a plausible channel.