Unlike existing studies on cram schools, the present study considers both the role of initial ability and corrects for self-selection bias. Initial ability is represented by the score of the basic competence test taken when the student enters senior high school. The present study finds that family background determines participation in cram schools, and the OLS results might overestimate the effect of cram schooling. If initial ability is not controlled, the participation in cram schooling increases the score on the general scholastic ability test (GSAT) for those who participate. After controlling for initial ability in the regression, cram schooling still increase the GSAT, but the magnitudes and degree of significance of the effect substantially decline When both self-selection and initial ability are considered, the effect of cram schooling is not significant, regardless of whether the effect of cram schooling is specified as linear or decreasing. Finally, both students who participate in cram schooling and those who do not earn higher scores on GSAT than if they had chosen differently. Without considering self-selection, the effects of cram schooling are overstated, leading to the incorrect conclusion that students who do not participate in cram schooling would enhance their GSAT score if they participated.