We use cookies to provide you with the best possible website experience. This includes cookies that are necessary for the operation of the site, as well as cookies used for anonymous statistics, comfort settings, or displaying personalized content. You can decide which categories you want to allow. Please note that depending on your settings, some features of the website may not be available.

Cookie settings

These necessary cookies are required to enable the core functionality of the website. Opting out of these cookies is not possible.

cb-enable
This cookie stores the user's cookie consent status for the current domain. Expiry: 1 year.
laravel_session
Stores the session ID to recognize the user when the page reloads and to restore their login session. Expiry: 2 hours.
XSRF-TOKEN
Provides CSRF protection for forms. Expiry: 2 hours.
IZA Discussion Paper No. 6681
June 2012
Peer Effects in Program Participation

published in: American Economic Review, 2014, 104 (7), 2049-2074

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. Our approach differs from existing literature which attempts to measure peer effects by exploiting random assignment to peer groups; in contrast, we study peer effects in naturally occurring peer groups, but exploit random variation in the "price" of a social program for a subset of individuals. Fathers of children born after April 1, 1993 in Norway were eligible for one month of governmental paid paternity leave, while fathers of children born before this cutoff were not. There is a sharp increase in fathers taking paternity leave immediately after the reform, with take up rising from 3% to 35%. While this quasi-random variation changed the cost of paternity leave for some fathers and not others, it did not directly affect the cost for the father's coworkers or brothers. Therefore, any effect on the brother or the coworker can be attributed to the influence of the peer father in their network. Our key findings on peer effects are four-fold. First, 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 father was induced to take up leave by the reform. Second, the most likely mechanism is information transmission about costs and benefits, including increased knowledge of how an employer will react. Third, there is essential heterogeneity in the size of the peer effect depending on the strength of ties between peers, highlighting the importance of duration, intensity, and frequency of social interactions. Fourth, the estimated peer effect gets amplified over time, with each subsequent birth exhibiting a snowball effect as the original peer father's influence cascades through a firm. Our findings demonstrate that peer effects can lead to long-run equilibrium participation rates which are substantially higher than would otherwise be expected.

Kommunikation
Mark Fallak
mark.fallak@liser.lu
+352 585-855-526
World of Labour
Olga Nottmeyer
olga.nottmeyer@liser.lu
+352 585-855-501
Netzwerkkoordination
Christina Gathmann
christina.gathmann@liser.lu

Das IZA@LISER-Netzwerk ist eine weltweite Gemeinschaft für exzellente Forschung in der Arbeitsmarktökonomie und angrenzenden Fachgebieten. Nach dem Wechsel von Bonn wird das Netzwerk nun am Luxembourg Institute of Socio-Economic Research (LISER) koordiniert.

Über das IZA@LISER Network
Contact
IZA Network (Current Site Operator):

Luxembourg Institute of Socio-Economic Research (LISER)
11, Porte des Sciences
Maison des Sciences Humaines
L-4366 Esch-sur-Alzette / Belval, Luxembourg

IZA Institute (In Liquidation):

Forschungsinstitut zur Zukunft der Arbeit GmbH i. L.
Schaumburg-Lippe-Str. 5-9, 53113 Bonn. Germany
Phone: +49 228 3894-0 | Fax: +49 228 3894-510
E-Mail: info@iza.org | Web: www.iza.org
Represented by: Martin T. Clemens (Liquidator)