This paper investigates whether the educational choices that young people make after the completion of their GCSEs (at age 16) are influenced by their peers. More specifically, it takes advantage of the variation in peer groups that arises when students move from primary to secondary school in order to isolate the impact of secondary school peers on the choice of educational trajectory. These trajectories are broadly classified as academic, vocational, a combination of the two, or no education at all. In order to overcome the common problems associated with the identification of peer effects, the ability of the primary school peers of secondary school peers, who are not going to the same secondary school, is used as an instrument for secondary school peer group quality. These ‘peers of peers’ did not go to the same primary or secondary school as the individual of interest and so cannot have had any direct impact on them. Our results show that higher ability peers reduce the likelihood that an individual will choose a vocational course at age 16 after controlling for the individual’s own ability.
We also find a very strong effect of household income on education choices, showing that the more deprived a student’s background is, the more likely they are to opt for a vocational trajectory over an academic one.