This article presents the empirical analysis of the effects of a school choice policy in Estonia. The article shows that relying on markets and giving autonomy to the schools over student selection will produce admission tests, even at the elementary school level. This article's contribution is to show that a school choice policy experiment with schools free to select students will produce between-school segregation effects based on residential and background characteristics. However, the interpretation of these effects is complex because, when compared with the premarket, residential choice model, it diminishes segregation based on income and family socioeconomic status.