Resource title

Class Size, Education, and Wages

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Resource description

This paper examines the effects of class size on the decision to stay on in full time schooling at the age of 16 and on wages at later stages in life. Little research exists on the effect of school quality on career decisions, although it has potentially important long term implications. We use micro data for England and Wales that contain an unusually rich set of variables on parental background and previous achievements. We find that class size, measured as the pupil-teacher ratio at the school level, has a sizeable and significant effect on the decision to remain in full time education beyond the minimum age. This finding is very robust and persists when school type variables, exam results, and results from past ability tests are controlled for. We also estimate wage equations including the staying on decision at age 16 as one of the explanatory variables. The effect of staying on is significantly positive for wages at age 33 and age 42, and for females also at age 23. Combining this effect with the effect of class size on the staying on decision, our results reveal that class size significantly affects future wages. Reduced form models in which wages are directly regressed on class size lead to much less accurate and generally insignificant estimates.

Resource author

Christian Dustmann, Najma Rajah, Arthur van Soest

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/21439

Resource license

Adapt according to the presented license agreement and reference the original author.