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Educational Production

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  • Edward P. Lazear

Abstract

The literature on class size yields a number of findings. First, class size effects are difficult to find except when using data where class size variations are truly exogenous. Second, Catholic schools have large classes and better performance. Third, to the extent that class size matters, it is more important for disadvantaged children. Special education classes are smaller than advanced placement classes. Fourth, when many children have joined a class recently, the joiners and their classmates do worse. The theory presented below reconciles all of these facts by recognizing that classroom teaching is a public good where congestion effects are potentially important. Because the optimal class size is larger for behaved-students, the observed relation of educational output to class size is small or even positive. However, increasing class size to ranges away from equilibrium levels will adversely affect educational output. The theory argues for a particular non-linear relation of educational output to class size and is consistent with observed variations in class size by grade level, student and teacher characteristics. Class sizes are more significant in small classes than large ones. There is a special function that maps the substitution of discipline for class size, which may explain why Catholic schools, with large classes, out-perform public schools. The same technology also implies that class size effects are larger for problem children than for well-behaved children. Private schools, which charge a positive price and compete with free public schools, attract better students. This selection may help explain why Catholic schools out-perform public schools even though expulsion rates are lower in Catholic schools than in public ones. Teachers may prefer smaller class size than students or parents either because wages do not reflect working conditions fully or because teachers as a group can raise the demand for their services by lowering class size. The theory provides a measurable and operational way to define school quality that can be tested empirically. Finally, because public schools that operate in a centralized environment do not capture the returns to their successes, public school incentives differ from those of private schools.

Suggested Citation

  • Edward P. Lazear, 1999. "Educational Production," NBER Working Papers 7349, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:7349
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    References listed on IDEAS

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    Cited by:

    1. Corak, Miles & Lauzon, Darren, 2009. "Differences in the distribution of high school achievement: The role of class-size and time-in-term," Economics of Education Review, Elsevier, vol. 28(2), pages 189-198, April.
    2. Tom Coupe & Anna Olefir & Juan Diego Alonso, 2011. "Is Optimization an Opportunity? An Assessment of the Impact of Class Size and School Size on the Performance of Ukrainian Secondary Schools," Discussion Papers 44, Kyiv School of Economics.
    3. Walter H. Fisher & Christian Keuschnigg, 2002. "Public Policy for Efficient Education," Metroeconomica, Wiley Blackwell, vol. 53(4), pages 361-390, November.
    4. Schettkat, Ronald, 2002. "Bildung und Wirtschaftswachstum (Education and economic growth)," Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 35(4), pages 616-627.
    5. Michael A. Boozer & Stephen E. Cacciola, 2001. "Inside the 'Black Box' of Project STAR: Estimation of Peer Effects Using Experimental Data," Working Papers 832, Economic Growth Center, Yale University.
    6. Laura Thissen & Sjef Ederveen, 2006. "Higher education; time for coordination on a European level?," CPB Discussion Paper 68, CPB Netherlands Bureau for Economic Policy Analysis.
    7. Dimiter Kanev, 2002. "Globalisation and High Education," Economic Thought journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 1, pages 32-55.
    8. Gordon Winston & David Zimmerman, 2004. "Peer Effects in Higher Education," NBER Chapters,in: College Choices: The Economics of Where to Go, When to Go, and How to Pay For It, pages 395-424 National Bureau of Economic Research, Inc.
    9. Thomas J. Nechyba, 2000. "Mobility, Targeting, and Private-School Vouchers," American Economic Review, American Economic Association, vol. 90(1), pages 130-146, March.
    10. repec:iab:iabmit:v:35:i:4:p:616-627 is not listed on IDEAS
    11. Alan B. Krueger, 2003. "Economic Considerations and Class Size," Economic Journal, Royal Economic Society, vol. 113(485), pages 34-63, February.
    12. Ahmed, Akhter U. & Arends-Kuenning, Mary, 2006. "Do crowded classrooms crowd out learning? Evidence from the food for education program in Bangladesh," World Development, Elsevier, vol. 34(4), pages 665-684, April.
    13. Kelly Bedard & William O. Brown, Jr., "undated". "The Allocation of Public School Expenditures," Claremont Colleges Working Papers 2000-16, Claremont Colleges.
    14. Ahmed, Akhter U. & Arends-Kuenning, Mary, 2003. "Do crowded classrooms crowd out learning?," FCND briefs 149, International Food Policy Research Institute (IFPRI).
    15. Eskeland, Gunnar S. & Filmer, Deon, 2002. "Autonomy, participation, and learning in Argentine schools - findings andtheir implications for decentralization," Policy Research Working Paper Series 2766, The World Bank.
    16. Becker, William E. & Powers, John R., 2001. "Student performance, attrition, and class size given missing student data," Economics of Education Review, Elsevier, vol. 20(4), pages 377-388, August.
    17. Thomas J. Nechyba, 1999. "A Model of Multiple Districts and Private Schools: The Role of Mobility, Targeting, and Private School Vouchers," NBER Working Papers 7239, National Bureau of Economic Research, Inc.
    18. Barbara M. Fraumeni & Marshall B. Reinsdorf & Brooks B. Robinson & Matthew P. Williams, 2008. "Price and Real Output Measures for the Education Function of Government: Exploratory Estimates for Primary & Secondary Education," NBER Working Papers 14099, National Bureau of Economic Research, Inc.
    19. Mingat, Alain & Tan, Jee-Peng, 2003. "On the mechanics of progress in primary education," Economics of Education Review, Elsevier, vol. 22(5), pages 455-467, October.
    20. Wößmann, Ludger, 2001. "New Evidence on the Missing Resource-Performance Link in Education," Kiel Working Papers 1051, Kiel Institute for the World Economy (IfW).
    21. Juliana de Lucena Ruas Riani & Eduardo Luiz Gonçalves Rios-Neto, 2004. "Impacto Dos Fatores Familiares, Escolares E Comunitários Na Quantidade E Qualidade Do Ensino No Estado De Minas Gerais," Anais do XI Seminário sobre a Economia Mineira [Proceedings of the 11th Seminar on the Economy of Minas Gerais],in: João Antonio de Paula & et alli (ed.), Anais do XI Seminário sobre a Economia Mineira [Proceedings of the 11th Seminar on the Economy of Minas Gerais] Cedeplar, Universidade Federal de Minas Gerais.

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