Scandinavian Working Papers in Economics

Research Papers in Economics,
Stockholm University, Department of Economics

No 2012:8: Long-term effects of class size

Peter Fredriksson (), Björn Öckert () and Hessel Oosterbeek ()
Additional contact information
Peter Fredriksson: Stockholm University, IZA, IFAU, and UCLS, Postal: Department of Economics, Stockholm University, S-106 91 Stockholm, Sweden
Björn Öckert: Institute for Evaluation of Labour Market and Education Policy (IFAU), Uppsala University and UCLS, Postal: IFAU, Box 513, 751 20 Uppsala, Sweden
Hessel Oosterbeek: University of Amsterdam, Postal: Amsterdam School of Economics, University of Amsterdam, Roetersstraat 11, Room 3.60, Building E, 1018 WB Amsterdam, The Netherlands

Abstract: This paper evaluates the long-term effects of class size in primary school. We use rich data from Sweden and exploit variation in class size created by a maximum class size rule. Smaller classes in the last three years of primary school (age 10 to 13) are beneficial for cognitive and non-cognitive ability at age 13, and improve achievement at age 16. Most importantly, we find that smaller classes have positive effects on completed education, wages, and earnings at age 27 to 42. The estimated wage effect is much larger than any imputed estimate of the wage effect, and is large enough to pass a cost-benefit test.

Keywords: Class size; regression discontinuity; cognitive skills; non-cognitive skills; educational attainment; earnings

JEL-codes: C31; I21; I28; J24

37 pages, July 5, 2012

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