School tracking divides students early by performance, but its effect on skill development is contested. We find that broader access to grammar schools boosts achievement and university ambitions across social groups, while peer quality has little influence – casting doubt on strict performance-based selection. Yet children from disadvantaged families benefit less, as rigid admission rules often exclude them, thus deepening inequality. Germany’s early, fixed tracking worsens this problem. New evidence therefore calls for reform-oriented debates that prioritise educational equity. Policymakers should relax admission criteria, set later assignment dates and increase permeability.
© 2025 Sarah McNamara, Thilo Klein, published by ZBW – Leibniz-Informationszentrum Wirtschaft
This work is licensed under the Creative Commons Attribution 4.0 License.