We present a theory explaining the impact of ability tracking on academic performance based on grading policies. Our model distinguishes between initial ability, which is mainly determined by parental background, and eagerness to learn. We show that achievements of low ability students may be higher in a comprehensive school system, even if there…

British secondary schools moved from a system of extensive and early selection and tracking in secondary schools to one with comprehensive schools during the 1960s and 70s. Before the reform, students would take an exam at age eleven, which determined whether they would attend an academically oriented grammar school or a lower level secondary…