Abstract
This study analyzes the long-run effects of secondary school track assignment for students at the achievement margin. Theoretically, track assignment maximizes individual outcomes when thresholds between tracks are set at the level of the indifferent student, and any other thresholds would imply that students at or around the margin are better off by switching tracks. We exploit non-linearities in the probability of track assignment across achievement to empirically identify the effect of track assignment on educational attainment and wages of students in the Netherlands, who can be assigned to four different tracks. We find that attending higher tracks leads to increases in years of schooling by around 1.5 years for students at the lowest and the highest choice margin, and wage gains of around 15% and 5%, respectively. For the margin between the two middle tracks, attending the higher of the two tracks has no effect on educational attainment and decreases wages by around 12%. The negative returns for the medium margin and the relatively low returns for the higher margin (compared to the required educational investments) are partly mediated by motivation and study choice.
Highlights
The grouping of students according to educational achievement is common across educational systems worldwide
OLS estimates are still valuable as they likely provide an upper bound of the average treatment effect (ATE) of attending the higher track at the margin, as one would expect that students in the higher track are better endowed in unobserved characteristics that are positively related to educational attainment and wages
A comparison of OLS results with and without controls for observable characteristics can provide an indication of how sensitive OLS models are to selection bias
Summary
The grouping of students according to educational achievement is common across educational systems worldwide. The motivation for such practices is that different students may require different environments and different levels of instruction to optimally develop their skills. Anglo-Saxon countries generally address this by selecting students into ability groups for different school subjects, while many Continental European countries sort secondary school students into different tracks that each have their own distinct curriculum. The use of tracking is continuously debated in both the public and the academic domain. Either explicitly or implicitly, the use of ability thresholds in order to sort students. Students above a particular threshold are deemed fit to attend the higher track, while those below are projected
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