What is essential is visible to the eye: Saliency in primary school ranking and its effect on academic achievements

TL;DR

This paper investigates how primary school class rank, both visible and invisible, influences students' perceptions and academic outcomes, revealing psychological mechanisms and peer effects using Italian panel data.

Contribution

It introduces a novel approach to distinguish visible and invisible class ranks and analyzes their distinct impacts on student perceptions and choices.

Findings

Visible rank significantly affects student perceptions and performance.

Higher-ranked students tend to choose high-achieving high schools.

Psychological mechanisms mediate the impact of class rank on students.

Abstract

We propose a new strategy to identify the impact of class rank, exploiting a "visible" primary school rank from teachers' exam grades, and an "invisible" rank from unreported standardized test scores. Leveraging a unique panel dataset on Italian students, we show that the visible rank has a substantial impact on students' perceptions, which affects subsequent academic performance. However, the effect of being surrounded by higher-SES or higher-achieving peers remains positive even accounting for the decrease in rank. Higher-ranked students self-select into high schools with higher average student achievements. Finally, exploiting an extensive survey, we identify psychological mechanisms channeling the rank effect.