No. 3/2015: Do smaller classes always improve students' long run outcomes?

Abstract

We exploit the strict class size rule in Norway and matched individual and school register information for 1982-2011 to estimate long run causal effects on income and educational attainment. Contrary to recent evidence from the US and Sweden, we do not find any significant average effect on long run outcomes of reduced class size. We further use the large register data set and quasi-experimental strategy to estimate whether the class size effect depends on external conditions facing students and schools, such as teacher quality, extent of upper secondary school choice, school district size, local fiscal constraints and labor market conditions. Overall, we find that the class size effect does not depend on school district characteristics. The absence of class size effects on long run outcomes in Norway is consistent with earlier findings for short run outcomes using comparable data and empirical strategies.