This article explores the mechanisms of educational pathway decision making at the transition from primary to secondary school in the German education system by analysing data from the Progress in International Reading Literacy Study (PIRLS). The highly reliable data of the German sample of the 2001 PIRLS make it possible to take into consideration simultaneously students' cognitive abilities at the end of primary schooling, criteria for parental decision making in education, as well as institutional adjustment options of family education strategies, in order to describe the complex mechanisms of educational pathway decision making. First, a general overview of the German education system and a review of the current state of research concerning the issue of social inequality of education in Germany are given. Subsequently, a theoretical background seeking to answer the question of how educational disparities arise and how they are structured, as well as a model for analysing parental choices in education are presented. After hypothesizing, multifarious statistical analyses are conducted with the aim of proving these assumptions and demonstrating how complex the mechanisms of educational segregation in Germany are. The results demonstrate that all participants in the process of decision making take a more or less socially biased achievement criterion as a basis and, thus, the logic of meritocracy does not seem to be an appropriate idea for segregating students into different branches of education at the end of primary schooling.