The Effect of Socioeconomic Rank on Psychosocial Health and Educational Attainment

Andrew McMartin , Princeton University

Previous research invokes psychosocial models to explain the consequences of socioeconomic disparities. The dynamics of status differentiation and resource allocation, however, have primarily been conceptualized at the macro level, overlooking the potential salience of hierarchies derived among peers in local contexts. In this study, I use data from Add Health and NCES to examine the influence of socioeconomic rank among schoolmates on psychosocial and educational outcomes. I exploit quasi-random variation across cohorts to mitigate selection bias, and isolate the effect of ordinal rank itself from that of peer composition, the magnitude of social distance, and absolute status. Results suggest that higher rank leads to improved psychosocial health and increased educational attainment, supporting an integration of the relative material deprivation framework with academic “frog-pond” models of peer comparison and competition. Attention to such local hierarchies in conjunction with aggregate processes may offer a more complete understanding of socioeconomic inequality.

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 Presented in Session 2. Children & Youth