Understanding how children's broader context influences their development is critical if we are to develop policies that help them flourish. Combining sociological, economic, and psychological literature, we argue that ability stratification--the degree to which children of similar levels of ability are schooled together--influences a child's academic self-concept. This is because countries with more ability stratification should have larger Big-Fish-Little-Pond Effects (the negative effect of school average achievement on academic self-concept). We used four cycles of the Trends in International Math and Science Study to test the hypothesis that more country-level ability stratification is associated with larger country-level Big-Fish-Little-Pond Effects for math self-concept. Findings strongly support this hypothesis. Our findings have implications for school system design and policy.