School Choice and the Distributional Effects of Ability Tracking: Does Separation Increase Equality?

Tracking programs have been criticized on the grounds that they harm disadvantaged children. The bulk of empirical research supports this view. These studies are conducted by comparing outcomes for across students placed in different tracks. Track placement, however, is likely to be endogenous with respect to outcomes. We use a new strategy for overcoming the endogeneity of track placement and find no evidence that tracking hurts low-ability children. We also demonstrate that tracking programs help schools attract more affluent students. Previous studies have been based on the assumption that students' enrollment decisions are unrelated to whether or not the school tracks. When we take school choice into account, we find evidence that low-ability children may be helped by tracking programs.