Teacher bias or measurement error?

In many countries, teachers' track recommendations are used to allocate students to secondary school tracks. Previous studies have shown that students from families with low socioeconomic status (SES) receive lower track recommendations than their peers from high SES families, conditional on standardized test scores. It is often argued that this indicates teacher bias. However, this claim is invalid in the presence of measurement error in test scores. We discuss how measurement error in test scores generates a biased coefficient of the conditional SES gap, and consider three empirical strategies to address this bias. Using administrative data from the Netherlands, we find that measurement error explains 35 to 43% of the conditional SES gap in track recommendations.