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Previous studies reveal small effects of school contexts on educational outcomes and tend to dismiss their importance in the educational attainment process. During the '60s, Israeli primary schools were very dissimilar in their student-body compositions. In addition, about half the schools practiced ability grouping, whereas the others did not group students. Analyzing data for the population of Jewish male students who attended the last grade of primary school during the late '60s, we find very large contextual effects on grades and expectations in the schools which did not group students. In schools which did group, contextual effects on expectations are very small.
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