A new working paper on friendships and test scores suggests that they may be substitutes rather than complements.
Do More Friends Mean Better Grades?: Student Popularity and Academic Achievement
Peer interactions have been argued to play a major role in student academic achievement. Recent work has focused on measuring the structure of peer interactions with the location of the student in their social network and has found a positive relationship between student popularity and academic achievement. Here the author ascertains the robustness of previous findings to controls for endogenous friendship formation. The results indicate that popularity influences academic achievement positively in the baseline model, a finding which is consistent with the literature. However, controlling for endogenous friendship formation results in a large drop in the effect of popularity, with a significantly negative coefficient in all of the specifications. These results point to a negative short term effect of social capital accumulation, lending support to the theory that social interactions crowd out activities that improve academic performance.