Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/215343 
Year of Publication: 
2020
Series/Report no.: 
IZA Discussion Papers No. 12947
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
We survey the recent, fast-growing literature on peer effects in networks. An important recurring theme is that the causal identification of peer effects depends on the structure of the network itself. In the absence of correlated effects, the reflection problem is generally solved by network interactions even in non-linear, heterogeneous models. By contrast, microfoundations are generally not identified. We discuss and assess the various approaches developed by economists to account for correlated effects and network endogeneity in particular. We classify these approaches in four broad categories: random peers, random shocks, structural endogeneity and panel data. We review an emerging literature relaxing the assumption that the network is perfectly known. Throughout, we provide a critical reading of the existing literature and identify important gaps and directions for future research.
Subjects: 
assimilation
immigrant health advantage
ethnic attrition
JEL: 
J15
J12
I14
Document Type: 
Working Paper

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