[Journal:] SERIEs - Journal of the Spanish Economic Association [ISSN:] 1869-4195 [Publisher:] Springer [Place:] Heidelberg [Volume:] 2 [Year:] 2011 [Issue:] 1 [Pages:] 31-52
The belief that both the behavior and outcomes of students are affected by their peers is important in shaping education policy. I analyze two polar education systems -tracking and mixing- and propose several criteria for their comparison. I find that tracking is the system that maximizes average human capital. Nevertheless, no single system is unanimously preferred by the entire population. In addition, I find that the gains of tracking, compared to mixing, are sensitive to changes in the level of dispersion in the pre-school achievement distribution of the population.
human capital efficiency peer effects tracking mixing