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We study the spillover effects of a reform that substantially increased the returns to schooling in kibbutzim, socialist-oriented communities in Israel. This reform, which induced kibbutz students to improve their high-school academic performance, spilled over to their non-kibbutz peers who attended the same schools. In the short run, the peers improved their high-school outcomes and shifted to courses with higher financial returns. In the long run, they completed more years of post-secondary schooling and increased their earnings. We discuss two possible spillover channels: standard classroom peer effects and increased salience of the relationship between education and financial success.