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On the optimal allocation of students when peer effects are at work: tracking vs. mixing


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.


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Corresponding author

Correspondence to Marisa Hidalgo-Hidalgo.

Additional information

This paper is part of my Ph.D. dissertation, completed at Universidad de Alicante under the very helpful supervision of Iñigo Iturbe-Ormaetxe. I am grateful for the comments and suggestions of Gianni De Fraja, Elena Del Rey, Moshe Justman, Francois Maniquet, Francisco Martínez-Mora and Ignacio Ortuño-Ortín. Thanks are due to the editor, María-Angeles de Frutos, and two anonymous referees for valuable comments that substantially improved the analysis of this paper. I also acknowledge members of the Department of Economics at University of Leicester, where part of this work was done, for their hospitality. Financial support from the Spanish Ministry of Education and Science (SEJ 2007-67734), Junta de Andalucía (SEJ-2905) and the Instituto Valenciano de Investigaciones Económicas is gratefully acknowledged. All remaining errors are mine.

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Hidalgo-Hidalgo, M. On the optimal allocation of students when peer effects are at work: tracking vs. mixing. SERIEs 2, 31–52 (2011).

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  • Human capital
  • Efficiency
  • Peer effects
  • Tracking
  • Mixing

JEL Classification

  • D63
  • I28
  • J24