The Distributional Effects of Early School Stratification – Non-Parametric Evidence from Germany

Whether early school stratification is conducive or detrimental to scholastic performance has been subject to controversial debates in educational policy and science across many countries. We exploit a unique exogenous variation in Lower Saxony, Germany, where performance based tracking was preponed from grade 7 to grade 5 in 2004, i.e. with the completion of primary school. In particular, we measure the long-run effects of this reform on PISA achievement test scores based on a difference-in-differences setup. In order to disentangle average from distributional achievement effects, we complementarily rely on a changes-in-changes framework. Our results indicate that preponed school tracking increased test scores at the upper tail of the skill distribution and lowered test scores at the lower tail of the skill distribution, compensating each other on average.*