The allocation of students into schools and classes by achievement is a common practice worldwide (OECD, 2012, Table 2.2). However, there are clear differences both in the form of the selection of students into the different tracks and in when in student’ educational path the selection happens. In some OECD countries, students are tracked relatively early into schools or tracks with differing curricula (e.g., Austria, Belgium, Germany, the Netherlands) whereas in others (e.g., the Nordic countries, France, Poland, Japan), all students follow the same curriculum at least through compulsory education and in some, even longer (e.g., the United States) (Eurydice 2014; OECD 2012). While the first type of tracking represent open ability-based differentiation, also the latter can and often do include differentiation based on ability or other student characteristics. In them, differentiation is organised by allocating students into different schools or into different tracks or streams within schools. The latter may compass permanent grouping covering all subjects or be subjects-specific as in the advanced placement (AP) courses common to many American schools (Chmielewski, 2014). Ability-based tracking and streaming has been a hotly debated topic for a long time with arguments often resting on a perceived trade-off between equity and efficiency (Entwistle & Alexander, 1992; Hanushek & Woessman, 2006; OECD, 2012, 2013).

The central argument for tracking is that homogeneous classrooms permit a focused curriculum and appropriately paced instruction, leading to better learning for all (Duflo, Dupas, & Kremer, 2011; Loveless, 2009). Arguments for ungrouped classrooms centre on the concern that lower ability students will be disadvantaged by less ideal learning environments regarding teacher proficiency, curricular content, and peer effect (Duru-Bellat & Mingat, 2006; Entwistle & Alexander, 1992). Some, however, have found no evidence for the impact of ability grouping on student performance (Duflo, Dupas, & Kremer, 2011; Figlio & Page, 2002; Lefgren, 2004; Zimmer, 2003), interpreting this to mean that the positive effect of achievement-specific instruction of tracking overcomes the negative (or lacking positive) effect of the more able peers for students in the lower-achievement tracks. 

Against this background, the present study focusses on between-class differences and their development in lower-secondary education in Finland, a country known for the high performance of its students and the small between-school differences in the OECD PISA studies (Programme for International Student Assessment). Undermining this, Finland stood out among the Nordic countries in the TIMSS 2011 study due to its considerably higher between-class differences at both grades 4 and 8 (Yang Hansen, Gustafson, & Rosén, 2014). To investigate this apparent challenge for educational equity in Finland further, the present study focusses on between-class differences and the role of class composition on the development of students’ cognitive competence and learning motivation through the three years of lower secondary education. The period can be seen as especially critical as it prepares students for the possibly most important choice regarding their future, the choice between the two tracks – academic and vocational – of the Finnish upper secondary education. In the study, class composition will be understood to be exemplified by the students’ cognitive competence, motivational attitudes, curricular attainment, SES, and class size.

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