Better peers, lower rank: gender differences in selective groups

Abstract The sharp downgrading in relative position for those barely qualifying for a selective group may undermine the expected benefits of joining higher-achieving peers. I exploit variation in admission cutoffs across different types of business majors programmes within a same university to study the causal impact that joining a selective group has on the academic performance of marginal students. Using a regression discontinuity design, I find that female students just above the cutoff (low ranked in a high-ability group) underperform compared to female students who remain just below (high ranked in a mixed-ability group). In contrast, male students either do not exhibit negative differences or, in some cases, show positive differences. After ruling out alternative mechanisms at the cutoff, I find that, conditional on their absolute ability, low ranked female students significantly underperform in selective groups, whereas low ranked male students tend to overperform in such groups. These findings have significant implications for human capital investment decisions and the transition of graduates into the labour market.