Smaller school classes leads to better student outcomes and higher wages

Whether a large or small class size plays any role in student learning is heatedly debated. Previous (primarily American) research has shown that small classes improve school outcomes in the short term; students learn more in school. But it has remained unclear whether these effects make a difference in working life.

The authors of the report studied cognitive and non-cognitive skills in 10 percent of cohorts born in 1967, 1972, 1977 and 1982, nearly 31 000 students. Questionnaires in 6^th grade provided the students' own perceptions of their endurance, self-confidence, and expectations. These were combined with test results in 6^th and 9^th grade, educational attainment, and their income as adults (27-42 years of age).

The report shows that students from small classes in grade 4 to 6 consistently have better results than students from large classes. Those in small classes had better cognitive and non-cognitive skills, had better scores on standardized national tests in grades 6 and 9, perceived themselves as having more self-confidence and greater endurance. The differences in school outcomes persisted throughout the rest of their compulsory schooling. The probability of going on to higher education was also greater for students in small classes. Those who were in small classes also earned more money as adults. A reduction in class size of five students entailed more than 3 percent higher wages.

"These higher wages in adulthood indicate that students from small classes are more productive," says Björn Öckert, an economist and one of the three researchers behind the report. "The effects on earning power are sufficiently large for the surplus to outweigh the direct costs of having smaller classes. This means that society recoups the costs of small classes. School resources play a role not only for student achievement, which previous research has shown, but also for how things turn out later in life."

Prior to 1991 in Sweden there were rules for the maximum number of students in a class. In grades 4 to 6 the number of students in a class could not exceed 30. If there were 31 students in a school grade, they had to be divided into two classes. The rules entailed substantial differences in class sizes for schools with nearly identical number of students, which is what the researchers used to measure the impact of class size.

IFAU Working paper 2012:5 Long-term effects of class size was written by Björn Öckert, IFAU, Peter Fredriksson Stockholm University, and Hessel Oosterbeek, University of Amsterdam.