Posh but Poor: The Association Between Relative Socio‐Economic Status and Children’s Academic Performance

It is well known that young people from more advantaged socio‐economic backgrounds have, on average, higher levels of academic achievement than their disadvantaged peers. Yet rather less is known about how the relative socio‐economic position of students might be related to their academic progression at school. This is the issue considered in this paper, using longitudinal administrative data covering the largest region within Spain. We find evidence that the relative socio‐economic position of students within their school is associated with grade retention, performance in standardized tests and attitudes towards school, even after controlling for the absolute level of their socio‐economic status. Our primary conclusion is that both absolute and relative social position matters for young people’s academic development.