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How do Classmates Matter for the Class-size Effects?

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  • TANAKA Ryuichi
  • WANG Tong

Abstract

This paper studies the effect of class-size reduction on students’ academic outcomes with a special focus on its heterogeneity based on classmates’ characteristics. We estimate the causal effects of class-size reduction on students’ mathematics and language test scores, controlling student-teacher fixed effects and applying the predicted class size with a cap as an instrument for the actual class size. Using rich panel data on Japanese primary school students, we find that the average effect of class size reduction is positive and robust for math test scores and that classes with high-ability classmates benefit even more from class size reduction. We find that the effect of class size reduction depends positively on the ability of the student with the lowest rank in a class. In addition, we find that classes with a high share of female students benefit more from class size reduction. Our findings provide strong support for the theoretical framework of Lazear (2001).

Suggested Citation

  • TANAKA Ryuichi & WANG Tong, 2024. "How do Classmates Matter for the Class-size Effects?," Discussion papers 24004, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:24004
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    References listed on IDEAS

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    1. Kedagni, Desire & Krishna, Kala & Megalokonomou, Rigissa & Zhao, Yingyan, 2021. "Does class size matter? How, and at what cost?," European Economic Review, Elsevier, vol. 133(C).
    2. Oriana Bandiera & Valentino Larcinese & Imran Rasul, 2010. "Heterogeneous Class Size Effects: New Evidence from a Panel of University Students," Economic Journal, Royal Economic Society, vol. 120(549), pages 1365-1398, December.
    3. Michael Gilraine, 2020. "A Method for Disentangling Multiple Treatments from a Regression Discontinuity Design," Journal of Labor Economics, University of Chicago Press, vol. 38(4), pages 1267-1311.
    4. Hideo Akabayashi & Ryosuke Nakamura, 2014. "Can Small Class Policy Close the Gap? An Empirical Analysis of Class Size Effects in Japan," The Japanese Economic Review, Japanese Economic Association, vol. 65(3), pages 253-281, September.
    5. Miguel Urquiola, 2006. "Identifying Class Size Effects in Developing Countries: Evidence from Rural Bolivia," The Review of Economics and Statistics, MIT Press, vol. 88(1), pages 171-177, February.
    6. Hanushek, Eric A, 1986. "The Economics of Schooling: Production and Efficiency in Public Schools," Journal of Economic Literature, American Economic Association, vol. 24(3), pages 1141-1177, September.
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