Abstract:
Place shapes the educational attainment of children, yet the underlying reasons remain poorly understood. In this paper, I investigate the role of spatial differences in educational signals received by students. Using Dutch administrative data combined with high-stakes national exam scores, I show that students receive less ambitious track recommendations in rural areas conditional on ability. The spatial difference is comparable to the impact of having a university-educated parent and explains around half of the spa- tial difference in academic track enrollment. Key mechanisms are spillovers from high SES peers and stronger beliefs in the importance of education among urban teachers.