Identifying class size effects in developing countries : evidence from rural schools in Bolivia

Although class size has attracted great interest as a policy instrument, inferences on its effects are controversial. Recent work highlights a particular way to consider the endogeneity issues that affect this variable: class size is often correlated with enrollment, which may in turn be related to socioeconomic status. In Bolivia, the author shows, these correlations are significant. Building from institutional arrangements that determine pupil-teacher ratios in rural areas, the author implements two research designs to deal with this issue. The first uses a teacher allocation pattern as an instrumental variable; the second relies on variation from remote schools with a single class per grade. Both suggest that class size has a negative effect on test scores.