Discrimination or explained differences? Individual and school-level effects explaining the minority achievement gap

This study is motivated by the distinctive outcome of the minority achievement gap in Estonia and Latvia, countries with similar legacies and socio-economic development. We have four sub-groups of schools involving pairs of instructing languages: Estonian and Russian in Estonia, and Latvian and Russian in Latvia. All four are above average performers according to international comparisons. Still, our data show that a remarkable achievement gap between majority and minority students exists only in Estonia. We employ the Oaxaca–Blinder twofold decomposition technique to explore the factors behind the minority achievement gap (MAG). We are able to explain almost half of the gap in Estonia by peer effects and the larger concentration of immigrants in minority schools. In Latvia, on the contrary, the average peer effect is positive in minority schools. Still, regarding the essence of the unexplained gap, our results remain inconclusive.