BECE. Newsletter Vol.21, No.1, 2025, BECE 2003 Peer Effects of High-Achieving Students By Chen, T. & Dong, C. Correspondence to: Caiting Dong, Guangdong University of Finance, China. E- mail: 47-301@gduf.edu.cn EER effects have not only near-term impacts on adolescents’ cognitive and non-cognitive development but also implications for their lifelong trajectories. This study is an investigation into the effects of the proportion of high-achieving students in a class on cognitive performance, educational ex- pectations, school adaptation, and mental health of their classmates, based on data of middle school students with random class assignment from the China Education Panel Survey (CEPS). Research Findings: • Middle school students who had ranked among top students in grade six in primary schools had a significantly positive influence on cognitive performance and educational expectations of their classmates. Yet, no such influence could be found on the latter’s school adaptation and mental health. The positive influence of high-achieving students may be due to the fact that they could serve as excellent role models for their peers, boosting motivation levels, increasing active learning, fueling interest in reading, en- hancing peer interaction quality in the latter. • On the other hand, high-achieving students also imposed certain academic pressures on their peers, leading to increased participa- tion in out-of-school tutoring and longer study hours in them. Heterogeneity analysis reveals that the former’s positive influence on the latter’s cognitive performance is short-term, only evident in the seventh grade and no longer significant in the ninth grade. Nevertheless, their influence on the educational expectations of ordinary students was more enduring. Additionally, the peer ef- fects of high-achieving female students were more prominent than those of their male counterparts. The findings of this empirical study have significant implications for China’s current educational policies at the compulsory education level, such as school place allocation reform and admission by lot-drawing. These poli- cies, which involve randomly assigning students to schools and balancing class compositions, can mitigate over-concentration of high-ability students in certain schools or classes. Dispersing high-ability students across schools P mailto:47-301@gduf.edu.cn Vol.21, No.1, 2025, BECE 2004 and classes can give fuller play to their exemplary roles and peer effects. Overall, this is beneficial for balanced development of basic education, nar- rowing academic divides caused by school choice, and promoting equity in education. Source: China Journal of Economics, 2025;12(02):265-282.