Through the analysis of 22 European countries and Canada, this article seeks to investigate the assumption that political macro level variables such as welfare state systems and immigration regimes shape the conditions encountered by young immigrants and thus have an impact on their school performance. The results show that native students benefit from social-democratic welfare states and immigration-friendly integration regimes, whereas immigrant students underperform under these types of regimes. Thus, while the finding for native students supports the argument found in the body of literature, claiming that social-democratic welfare states lead to a reduction in inequality and to less stratification, the findings for immigrant students suggest that positive discrimination may under some circumstances lead to a counterproductive result. The argument is tested with a multilevel modelling procedure on three levels (student, school and country) based on different data sources.