Royal Economic Society

PUPILS TAUGHT IN SMALLER CLASSES STAY IN EDUCATION LONGER AND IMPROVE THEIR EARNING POWER

Class size has a significant effect on the decision to remain in full-time education beyond the minimum age, according to new research by Dr Christian Dustmann and colleagues, published in the latest issue of the Economic Journal. The lower the pupil-teacher ratio, the more likely are the pupils to stay in school and go on to university – and this result holds even when controlling for different kinds of school, exam results and results from past ability tests.

What’s more, by prolonging school attendance, smaller classes lead to small but significant effects on future wages. The researchers calculate that a reduction in class size by five pupils would increase lifetime earnings by £3,415 for men and £2,445 for women – or an average benefit per pupil of £2,930.

Their analysis is based the National Child Development Survey, which collects data on a large cohort of British people born in one week in 1958.

The 1981, 1991 and 2000 surveys of these people indicate that the effect of continuing to higher education had a significantly positive effect on wages for both men and women at age 33 and age 42, as well as for women at age 23.

In its 1997 election manifesto, the Labour Party committed itself to reducing class sizes for five, six and seven year olds. Provisional data suggest that average class sizes in primary schools in England fell from 27.7 in 1998 to 26.7 in 2001. There has also been a slight decrease in secondary school class sizes over the same period.

In the 1998 White Paper Learning to Succeed, the government recognised that there may be a link between school quality and career decisions at age 16. The document suggested that ‘young people can be turned off higher education by poor experiences at any stage of their lives, but critical points usually occur between the ages of 13-19’.

This study incorporates the staying on decision at age 16 as the mechanism through which class size affects education level and future wages. It shows that bigger class size has a significant negative effect on wages later in life.

The authors conclude that: ‘Considering all the evidence, we conclude that class size affects educational outcomes of teenagers in the UK by prolonging school attendance, conditional on the type of school the teenager attends’.

ENDS

Notes for Editors: ‘Class Size, Education and Wages’ by Christian Dustmann, Najma Rajah and Arthur van Soest is published in the February 2003 issue of the Economic Journal.

Dustmann is in the Department of Economics at University College London, Gower Street, London WC1E 6BT; Rajah is at Frontier Economics; and van Soest is at Tilburg University.

For Further Information: contact Christian Dustmann on 0207-679-5832 (fax: 020-7916-2775; email: c.dustmann@ucl.ac.uk); or RES Media Consultant Romesh Vaitilingam on 0117-983-9770 or 07768-661095 (email: romesh@compuserve.com).