Estimation of Class-Size Effects, Using "Maimonides' Rule" and Other Instruments: the case of French Junior High Schools

Using a rich sample of students from French junior high schools with a panel structure, we obtain small but significant and negative effects of class size on probabilities of educational success, in grades 6 and 7. A 10 student reduction of class-size would put the child of a blue collar on an equal footing with the child of an educated professional, in grade 6. These effects vanish in grades 8 and 9. We use Angrist and Lavy’s (1999) theoretical class size (i.e., ”Maimonides’ rule”) as an instrument for observed class size. This is possible, due to availability of actual class size and total grade enrollment in our exceptional data set. We control for many family background variables and entry test grades. Using a Probit framework to model transitions from one grade to another (and thus grade repetitions), we simultaneously estimate the student’s probabilities of success over 4 years in junior high school. The simultaneous equation model allows for estimation of a general covariance structure of the error terms affecting latent student-performance and class-size equations, which sheds light on the endogeneity of class-size.