Iowa State University
Department of Economics
467 Heady Hall, 518 Farm House Lane
Ames, IA 50011-0154
Institutional Affiliation: Iowa State University
NBER Working Papers and Publications
|April 2019||Does Class Size Matter? How, and at What Cost?|
with Kala Krishna, Rigissa Megalokonomou, Yingyan Zhao: w25736
Using high quality administrative data on Greece we show that class size has a hump shaped effect on achievement. We do so both nonparametrically and parametrically, while controlling for potential endogeneity and allowing for quantile effects. We then embed our estimates for this relationship in a dynamic structural model with costs of hiring and firing.
We argue that the linear specification form used in past work may be why it found mixed results. Our work suggests that while discrete reductions in class size may have mixed effects, discrete increases are likely to have very negative effects while marginal changes in class size would have small negative effects.
We find optimal class sizes around 27 in the absence of adjustment costs and achievement maximizing ones around 15, and firi...