We study the causal impact of intellectually gifted students on their nongifted classmates' school achievement, enrollment in post-compulsory education, and occupational choices. Using student-level administrative and psychological data, we find a positive effect of exposure to gifted students on peers' school achievement in both math and language. This impact is heterogeneous: larger effects are observed among male students and high achievers; female students benefit primarily from female gifted students; effects are driven by gifted students not diagnosed with emotional or behavioral disorders. Exposure to gifted students increases the likelihood of choosing a selective academic track and occupations in STEM fields.

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While the number of students with identified special needs is increasing in developed countries, there is little evidence on academic outcomes and labor market integration returns to special education. I present results from the first ever study to examine short-and long-term returns to special education programs using recent methods in causal machine learning and computational text analysis. I find that special education programs in inclusive settings have positive returns on academic performance in math and language as well as on employment and wages. Moreover, I uncover a positive effect of inclusive special education programs in comparison to segregated programs. However, I find that segregation has benefits for some students: students with emotional or behavioral problems, and nonnative students. Finally, using shallow decision trees, I deliver optimal placement rules that increase overall returns for students with special needs and lower special education costs. These placement rules would reallocate most students with special needs from segregation to inclusion, which reinforces the conclusion that inclusion is beneficial to students with special needs.

This paper examines how exposure to students identified as gifted (IQ 130) affects achievement in secondary school and enrollment in post-compulsory education. By using unique student-level administrative data on achievement combined with psychological examination records, we are able to study the causal impact of gifted students on their classmates in unprecedented detail. We find a positive and significant effect of the exposure to gifted students on school achievement in both math and language. The impact of gifted students is, however, highly heterogeneous along three dimensions. First, we observe the strongest effects among male students and high achievers. Second, we show that male students benefit from the presence of gifted peers in all subjects regardless of their gender, whereas female students seem to benefit exclusively from the presence of female gifted students. Third, we find that gifted students diagnosed with emotional or behavioral disorders have zero-to-negative effects on their classmates' performance, a detrimental effect more pronounced for female students. After compulsory schooling, the results show that exposure to gifted classmates increases the likelihood of choosing a selective academic track. This effect, however, is entirely driven by male students.