The analysis focuses on the relationship between peer composition in school and differences in educational achievement. Research questions refer to testing two competing hypotheses: heterogeneous vs. homogeneous grouping of peers improves students’ performance. Further research questions investigate whether students with detrimental parental background benefit from studying in heterogeneous schools or students with advantageous parental background perform worse in integrated schools. The paper uses the PISA 2003 data to analyze the consequences of the various possibilities of peer compositions. Results revel that pupils’ social background has a strong impact on educational achievement. Having larger variation of peers in the school with various social backgrounds does not increase performance but students with more privileged social origin perform better in less heterogeneous schools with higher social quality.
A second analytical question is how major divisions in the school system like public–private, tracking either by curriculum or by ability, and schools’ practice regarding admittance of students affect scholastic performance. Apparently, parents consider these options when deciding about school choice. Furthermore, school’s position has an impact on students’ performance even if controlled for school composition. The results from the PISA 2006 survey indicate that high-status families prefer more selective schools with the exception of ability tracking. Moreover, the more selective schools perform better, but ability grouping does not improve achievement. Applying interaction terms shows that religious schools are able to compensate the disadvantages of pupils coming from low-status families at most.