Schooling is now considered the major factor underlying the development of cognitive abilities. However, most studies on the effect of schooling on cognitive development have been conducted in free and generally supportive western environments. The possible variability of schooling effects between educational systems differing in the quality of schooling they provide or in the ability of the student population to benefit from schooling has been neglected. This work contributes to the study of this variability by estimating the effect of schooling on cognitive development in an educational system characterised by particularly unfavourable circumstances, which combine poor schooling quality and low ability of the student population to benefit from schooling due to economic disadvantage, military occupation, and political oppression: the UN Relief and Works Agency Palestinian refugee camps of the West Bank. The results indicate a lower contribution of schooling to children's cognitive development, both relative to that found in western countries and relative to the effect of age. Schooling is not the major factor underlying children's cognitive development in the refugee camps in the West Bank. These results illustrate the between-system variability of the schooling effects and suggest that poverty and oppression negatively affect the effect of schooling on cognitive development.