Peer Effects in Program Participation

47 Pages Posted: 21 Aug 2013

See all articles by Gordon B. Dahl

Gordon B. Dahl

UC San Diego - Department of Economics; National Bureau of Economic Research (NBER); University of Rochester - Department of Economics

Katrine Vellesen Løken

University of Bergen - Department of Economics

Magne Mogstad

University of Chicago

Multiple version iconThere are 3 versions of this paper

Date Written: July 31, 2013

Abstract

The influence of peers could play an important role in the take up of social programs. However, estimating peer effects has proven challenging given the problems of reflection, correlated unobservables, and endogenous group membership. We overcome these identification issues in the context of paid paternity leave in Norway using a regression discontinuity design. We find strong evidence for substantial peer effects of program participation in both workplace and family networks. Coworkers and brothers are 11 and 15 percentage points, respectively, more likely to take paternity leave if their peer was exogenously induced to take up leave. The most likely mechanism is information transmission about the costs and benefits of taking paternity leave, including increased knowledge of how an employer will react. The estimated peer effect snowballs over time, as the first peer interacts with a second peer, the second peer interacts with a third peer, and so on. This leads to long-run participation rates which are substantially higher than would otherwise be expected.

Keywords: program participation, peer effects, social interactions

JEL Classification: H530, J130, I380

Suggested Citation

Dahl, Gordon B. and Løken, Katrine Vellesen and Mogstad, Magne, Peer Effects in Program Participation (July 31, 2013). CESifo Working Paper Series No. 4349, Available at SSRN: https://ssrn.com/abstract=2313555

Gordon B. Dahl

UC San Diego - Department of Economics ( email )

9500 Gilman Drive
Mail Code 0502
La Jolla, CA 92093-0112
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

University of Rochester - Department of Economics

Harkness Hall
Rochester, NY 14627
United States

Katrine Vellesen Løken (Contact Author)

University of Bergen - Department of Economics ( email )

Fosswinckelsgt. 6
N-5007 Bergen, 5007
Norway

Magne Mogstad

University of Chicago ( email )

1101 East 58th Street
Chicago, IL 60637
United States

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