Combating Negative Peer Effects: Evidence from Judicial and School Resource Interventions

Recent empirical work on peer effects has primarily focused on identification. However, little is known about the extent to which social and education policy can mitigate the negative spillovers caused by disruptive children. This paper examines two such policies. First, we examine whether filing for a restraining order against domestic violence diminishes the negative peer effect imposed by that parent's child. Second, we investigate whether the exogenous placement of additional school counselors diminishes these negative peer effects. We find that parental reporting to the court eliminates the negative peer effects and one additional school counselor increases student math and reading achievement by 1.1 percentile points. The counselor effects are three times greater than the effect of reducing class size by hiring an additional teacher. Further tests provide suggestive evidence that when the schools are notified of a restraining order, counselors shift their focus toward those children. In doing so, this may help eliminate the negative peer effect. Collectively, our results suggest that interactions between social policy and schools may be important in overcoming negative peer effects.