This paper establishes a new fact about educational production: ordinal academic rank during primary school has long-run impacts that are independent from underlying ability

Top of the Class: The Importance of Ordinal Rank. Richard Murphy, Felix Weinhardt. NBER Working Paper No. 24958. http://www.nber.org/papers/w24958

Abstract: This paper establishes a new fact about educational production: ordinal academic rank during primary school has long-run impacts that are independent from underlying ability. Using data on the universe of English school students, we exploit naturally occurring differences in achievement distributions across primary school classes to estimate the impact of class rank conditional on relative achievement. We find large effects on test scores, confidence and subject choice during secondary school, where students have a new set of peers and teachers who are unaware of the students’ prior ranking. The effects are especially large for boys, contributing to an observed gender gap in end-of-high school STEM subject choices. Using a basic model of student effort allocation across subjects, we derive and test a hypothesis to distinguish between learning and non-cognitive skills mechanisms and find support for the latter.