Classroom ethnic diversity and grades

When parents try to get their children into good schools, there are typically two reasons: (1) they hope that the signal provided by the good school will lead to better outcomes for their children; and (2) they hope that their children will benefit from interacting with 'higher quality' peers. Peer effects have been subject to a large research literature (see this 2011 review by Bruce Sacerdote (ungated version here). For instance, there is evidence that being peered with high achieving students leads to higher achievement (although, interestingly, the book I reviewed yesterday suggested that the peer effects literature was less than robust).

The composition of peers may matter other than through their ability. This 2018 article by Angela Dills (Western Carolina University), published in the journal Economic Inquiry (sorry, I don't see an ungated version online) looked at how the ethnic make-up of the classroom affects grades. Specifically, she used data from 4435 non-honours students from 2009 to 2013, who were automatically enrolled into a compulsory course (Development of Western Civilization 101), and randomly allocated to a section. So, the students had no control over who their peer group in the class was, or the racial composition of the section. This randomisation (and the compulsory nature of the course) overcomes any selection bias.

Looking at how students' grades in the course are affected by the fraction of their classmates who are people of colour, she found nothing much significant in a linear model. However:

The effect of the percent of classmates of color on grades appears strongly nonlinear... Allowing for the quadratic term in percent minority, the estimates show no statistical difference in effects for whites and for nonwhites. At low levels of diversity, the effect of increasing the percent minority is negative; the sign of this effect turns positive with about 18% of classmates being students of color. For a class with 25% students of color, the effect of a 10 percentage point increase is a positive and statistically significant increase of about 0.1 grade points (p value=.003).

There is also some evidence that the effects differ between high-ability students and low-ability students (particularly for black students), but I don't find those results to be as convincing. The range of the proportion non-white students was rather narrow, with sections ranging from 0 percent to 30 percent non-white. It would have also been interesting to see some measures of ethnic diversity (rather than the fairly coarse measure proportion non-white) used in the analysis. Overall, we can consider this paper as providing some suggestive evidence that having diverse peers in the classroom is a good thing.