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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 extend knowledge. We show that achievements of low ability students may be higher in a comprehensive school system, even if there are no synergy effects from teaching different students together. This arises because the comprehensive school sets a compromise standard which exceeds the standard from the low ability track. Moreover, if students with lower initial ability have higher eagerness to learn, merging classes will increase average performance.

Academic Achievement and Tracking A Theory Based on Grading Standards