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In 2003, Chicago schools required students entering ninth grade with below-
average math scores to take two periods of algebra. This led to higher test
scores for students with both above- and below-average skills, yet failure rates
increased for above-average students. We examine the mechanisms behind
these surprising results. Sorting by incoming skills benefitted the test scores
of high-skill students partially through higher demands and fewer disruptive
peers. But more students failed because their skills were low relative to class-
room peers. For below-average students, improvements in pedagogy and
more time for learning offset problems associated with low-skill classrooms.
In some cases, classrooms were not sorted, but below-average students took
an extra support class simultaneously. Test scores also improved in such
classes.