If Friends Choose in Our Place

In a society with persistent gender gaps, understanding the fundamental determinants of pay differentials appears of great relevance for both policy makers and academics. A striking evidence often found in previous researches is that, despite the fact that girls generally outperform boys during high school, their advantage seems to be reversed once they enter the job market. This phenomenon is partly explained by the fact that choices of college majors differ substantially across male and female students. Specifically, boys have a higher propensity to enroll in college majors such as Economics, Business and Engineering, generally associated to higher payoffs after graduation, while women have an inclination towards Humanities and Education, characterized by lower monetary returns.

In a recent study we examine whether the networks that teenagers form during high school have an influence on their choice of college major. Specifically, we assess whether the gender composition of high school classes affects students' choices of university major and whether it has a long run impact on their college performance and labor market outcomes. Indeed, it has widely been acknowledged that peer environment plays an important role in affecting performances and preferences of individuals. Since university major strongly affects the potential earnings of a person, and since women remain segregated in majors with lower expected earnings, it is of great importance to identify the determinants of such segregation and direct policy makers' intervention.

To carry out their research question, a unique database has been created, by collecting records for 30,000 individuals who graduated from college preparatory public high school in the municipality of Milan, Italy, between 1985 and 2005, and this information has been linked to their college career and to labor market outcomes. What we find is that male students attending a class where more than 80% of students are of their own gender, are 6 percentage points more likely to enroll in high paying majors with respect to a baseline probability of 43%. This is equivalent to a 14% increase in the probability of attending these majors. If the share of males in the class is above 90%, then the same probability increases by 35%. Contrary to this large effect for boys, they find that the gender share of high school peers does not have any effects on the choice of university major of girls, not even in the case of more extreme class composition.

These differences across genders find an explanation in the dynamics of friendship networks formation: while female teenagers prefer small networks with peers of the same sex no matter the gender share in the class, males tend to form broader and more inclusive ones. In male dominated classes, boys indeed end up in larger networks, which imply greater information sharing and larger potential for peer pressure.

Interestingly, when looking at long run outcomes, the effect on the choice of major of boys vanishes: university dropout rates are larger for boys from male dominated classes and no measurable long run effects on labor market outcomes can be found. This suggests that peer imitation leads to suboptimal choices: because of peer pressure, male students might decide to enroll in Economics, Business and Engineering majors, although they lack the abilities to graduate from them.

These results bring about two important policy considerations and cautionary tales. First, they reveal that, when debating on the effects of peers in school, a myopic focus on short run outcomes may lead to misleading conclusions: for instance, policies shifting people towards STEM majors does not automatically produce positive results but, on the contrary, it may cause mismatches and create inefficiencies. Second, contrary to the wide-spread idea supporting single-sex education as a solution to reduce the gender gap in science, these findings suggest that policies altering high school gender environment are most likely ineffective in reducing the gender gap. If anything, they might exacerbate it by pressuring even more boys to attend science majors.