Unpicking economic papers: a paper on behaviour

One of the papers that made a viral appearance on Twitter is a paper on behaviour in the classroom. Maybe it’s because of the heightened interest in behaviour, for example demonstrated in the DfE’s appointment of Tom Bennett, and behaviour having a prominent place in the Carter Review.

Carrell, S E, M Hoekstra and E Kuka (2016) “The long-run effects of disruptive peers”, NBER Working Paper 22042. link.

The paper contends how misbehaviour (actually, domestic violence) of pupils in a classroom apparently leads to large sums of money that people will miss out of later in life. There, as always, are some contextual questions of course: the paper is about the USA, and it seems to link domestic violence with classroom behaviour. But I don’t want to focus on that, I want to focus on the main result in the abstract: “Results show that exposure to a disruptive peer in classes of 25 during elementary
school reduces earnings at age 26 by 3 to 4 percent. We estimate that differential exposure to children
linked to domestic violence explains 5 to 6 percent of the rich-poor earnings gap in our data, and that
removing one disruptive peer from a classroom for one year would raise the present discounted value
of classmates’ future earnings by $100,000.”.

It’s perfectly sensible to look at peer effects of behaviour of course, but monetising it -especially with a back of envelope calculation (actual wording in the paper!)- is on very shaky ground. The paper respectively looks at the impact on test scores (table 3), college attendance and degree attainment (table 4), and labor outcomes (table 5). The latter is also the one reported in the abstract.

There are some interesting observations here. The abstract’s result is mentioned in the paper “Estimates across columns (3) through (8) in Panel A indicate that elementary school exposure to one additional disruptive student in a class of 25 reduces earnings by between 3 and 4 percent. All estimates are significant at the 10 percent level, and all but one is significant at the 5 percent level.” The fact economists would even want to use 10% (with such a large N) is already strange to me. Even 5% is tricky with those numbers. However, the main headline in the abstract can be confirmed. But have a look at panel C. It seems there is a difference between ‘reported’ and ‘unreported’ Domestic Violence. Actually, reported DV has a (non-significant) positive effect. Where was that in the abstract? Rather than a conclusion along the lines whether DV was reported or not, the conclusion only focuses on the negative effects of *unreported* DV. I think it would be more fair to make a case for better signalling and monitoring of DV, so that negative effects of unreported DV are countered; after all, there are no negative effects on peers when reported.