Although the Nordic educational models have traditions of inclu-sion, researchers have found strong evidence that they can repro-duce inequalities for minoritized groups attending primary and lower secondary schools. Following Luhmann’s system theory, this structurally orientated study identifies problems in the educa-tional system that are caused by communication at the institu-tional level and in the translation of inclusive goals in urban educational institutions. We synthetise literature focusing on Norway, Sweden, and Finland to investigate the differences between the Nordic educational systems’ explicit welfare goals and the gap between equity as an ideology and a system output from the functionally differentiated urban compulsory education. This review focuses on 113 peer-reviewed academic articles pub-lished during the last decade (after January 2012 until December 2021) that examine educational inequality and margin-alisation in Nordic urban schools. Our analysis is based on system theories highlighting three crucial discussions of inequality in the three Nordic systems: residential segregation and school areas, the impact of performance evaluations, and discriminatory support measures. Moreover, the results indicate differences in communi-cation in the different countries.