Association for Public Policy Analysis & Management

Class size reduction policies are common across the United States of America, especially at the elementary school level. Much of the enthusiasm for class size reduction policies has been driven by one of the most influential education experiments, the Tennessee STAR study. When class size reduction policies are implemented outside experimental settings, there can be tradeoffs, including needing to hire more teachers. Now that class size reduction policies have been implemented at scale in many US states, it is important to understand the effects of such policies.

This study uses an instrumental variables approach to assess the impact of class size on academic test score outcomes for North Carolina 3^rdgrade students who were in school when North Carolina’s class size reduction policy was fully implemented and fully funded; our study sample is approximately 900,000 students. The instrument relies on the strict implementation of North Carolina’s class size reduction policy, which stated that no 3^rdgrade class could be larger than 24 students. Assuming that fluctuations in grade size are quasi-random, small differences in grade size could have large implications for class size. Similar studies that have been done in other states and countries to look at the association between class size and student academic outcomes have had mixed results.

The study finds a small but statistically significant effect of 3^rdgrade class size on both math and reading 3^rdgrade test scores. The magnitude of the effect of class size was similar for both math and reading test scores. A one-student increase in class size was associated with a 0.003 standard deviation decrease in both math and reading test scores; a five-student increase in class size was associated with a 0.013 standard deviation decrease in a student’s math score and a 0.014 standard deviation decrease in a student’s reading score.

This study aligns with findings by others that smaller class sizes appear to be beneficial for elementary academic outcomes. However, the magnitude of the effect observed in North Carolina students was relatively small. While class size reduction policies appear to be beneficial for student test scores, there may be more cost effective ways to increase student achievement.