Schools and Learning Inequality: A Theoretical Model and Quasi-Experimental Evidence

Do schools reduce or amplify learning gaps by socioeconomic background? I develop a formal model that clarifies the estimands implicit in the literature and synthesizes its seemingly contradictory findings by distinguishing between exposure, or how much schooling children receive, and quality, or which schools they attend. The model shows that schools can compensate for inequality, by displacing more unequal learning outside school, while simultaneously reproducing it, both positionally, through the sorting of children into schools of unequal quality, and dispositionally, through differences in how children convert schooling into learning. Empirically, I test three of the model's predictions using Danish register data and variation from changes in school district boundaries over time. I find that the effects of school quality exceed those of exposure, are concentrated among socioeconomically disadvantaged children, and are larger where sorting into schools is stronger. Equalizing school quality can therefore be an effective means of reducing learning inequalities.