Externalities in the Classroom: How Children Exposed to Domestic Violence Affect Everyone's Kids

There is a widespread perception that externalities from troubled children are significant, though measuring them is difficult due to data and methodological limitations. We estimate the negative spillovers caused by children from troubled families by exploiting a unique dataset in which children's school records are matched to domestic violence cases. We find that children from troubled families significantly decrease the reading and math test scores of their peers and increase misbehavior in the classroom. The achievement spillovers are robust to within-family differences and when controlling for school-by-year effects, providing strong evidence that neither selection nor common shocks are driving the results.