The Effects of Free Secondary School Track Choice: A Disaggregated Synthetic Control Approach

Abstract

We exploit a recent state-level reform in Germany that granted parents the right to decide on the highest secondary school track suitable for their child, changing the purpose of the primary teacher's recommendation from mandatory to informational. Applying a disaggregated synthetic control approach to administrative district-level data, we find that transition rates to the higher school tracks increased substantially, with stronger responses among children from richer districts. Simultaneously, grade repetition in the first grades of secondary school increased dramatically, suggesting that parents choose school tracks also to align with their own aspirations – resulting in greater misallocation of students.

JEL Classification: C210, C460, I210, I280, J240