The Effect of Tracking Students by Ability into Different Schools: a Natural Experiment

The tracking of pupils by ability into elite and non-elite schools represents a common, but highly controversial policy in many countries. In particular, there is no consensus on how large the elite track should be and, consequently, little agreement on the potential effects of any further increase in its size. This paper presents a natural experiment where the increase in the relative size of the elite track was followed by a very significant improvement in average educational outcomes. The experiment under consideration provides a rare opportunity to isolate the overall contextual effect of allowing entry to the elite track for a group that was previously only at the margin of being admitted.