FIELDS OF INTEREST Primary: Labor Economics, Microeconometrics Secondary: Development Economics

Recent literature has shown that skills are not only essential for the development of successful adults, but also that they are malleable and prone to be affected by many experiences, especially during childhood. I examine how bullying, an unfortunately common childhood experience, depletes skills in school children. I use a unique longitudinal data set on middle school students to estimate a structural dynamic model of skill accumulation based on the identification of unobserved heterogeneity. I allow skill formation to depend on past levels of skills, parental investment and bullying. Also, I allow bullying itself to depend on each student’s past skills and those of his or her classmates. I find that being bullied at age 14 depletes current skill levels by 33 % of a standard deviation for the average child. This skill depletion causes the individual to become almost twice more likely to experience bullying again at age 15. Therefore bullying triggers a self-reinforcing mechanism that opens an ever-growing skill gap that reaches about one standard deviation by age 16. Finally, I find evidence that supports the allocation of students i