Intraschool variation in class size: Patterns and implications

In this paper we estimate the effect of actual class size on student achievement. Once we address the endogeneity induced by the correlation between class size and the "ability" of the class, we find that larger classes have a significant and negative effect on test scores. Further, since race/ethnicity is correlated with assignment to compensatory education classes, measures of class size that vary only at the school level obscure the true mean racial/ethnic differences in the class sizes. We find that racial/ethnic differences in class size potentially account for a substantial portion of the racial/ethnic differences in test score gains. (C) 2001 Academic Press.