Separating gender composition effects from peer effects in education

This paper aims to demonstrate the importance of controlling for endogenous peer effects in estimating the influence of gender peer effects on educational outcomes. Using Manski's linear-in-means model, this paper illustrates that the estimation of gender peer effects is potentially biased in the presence of endogenous peer effect in education. The appropriate gender peer effect is estimated after identifying and controlling for the endogenous effect through the use of Graham's variance-restriction method.