Diverging performances: the detrimental effects of early educational selection on equality of opportunity in Hungary

The Hungarian system is ideal to test the effect of early-selection on inequality of opportunity, since students are selected at three different ages. The early-selective academic tracks skim off the best students first at age 10, then at age 12, and finally at age 14 all students enter secondary level. The paper first shows that higher socioeconomic status students are more likely to attend the early-selective academic tracks, even if previous test scores are controlled for. The second part of the empirical analysis looks at the value-added of the separate tracks between 6th and 8th grade, and between 8th and 10th grade, and shows that their mathematical and reading performance diverges, even if skill and status selection is taken into account. Since higher socioeconomic status students are more likely to attend academic tracks than their lower status peers, the divergence in test scores translates to increasing inequality of opportunity. The Section 3 of the empirics looks at whether this process is a Pareto improvement, or whether there are groups in society that lose by the early-selection. It is shown that those who are left in general schools in areas where the best students can opt-out to early-selective tracks perform worse in mathematics than similar students in general tracks with no option of leaving. That is, selection harms those who are left behind. The paper speculates that these results are due to the different peer and teacher quality of the different tracks.