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  4. March 2009
  5. Class-Size Caps, Sorting, and the Regression-Discontinuity Design

American Economic Review

ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)

Class-Size Caps, Sorting, and the Regression-Discontinuity Design

  • Miguel Urquiola
  • Eric Verhoogen
American Economic Review
vol. 99, no. 1, March 2009
(pp. 179–215)
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Abstract

This paper examines how schools' choices of class size and households' choices of schools affect regression-discontinuity-based estimates of the effect of class size on student outcomes. We build a model in which schools are subject to a class-size cap and an integer constraint on the number of classrooms, and higher-income households sort into higher-quality schools. The key prediction, borne out in data from Chile's liberalized education market, is that schools at the class-size cap adjust prices (or enrollments) to avoid adding an additional classroom, which generates discontinuities in the relationship between enrollment and household characteristics, violating the assumptions underlying regression-discontinuity research designs. (JEL D12, I21, I28, O15)

Citation

Urquiola, Miguel, and Eric Verhoogen. 2009. "Class-Size Caps, Sorting, and the Regression-Discontinuity Design." American Economic Review, 99 (1): 179–215. DOI: 10.1257/aer.99.1.179

Additional Materials

JEL Classification

  • D12 Consumer Economics: Empirical Analysis
  • I21 Analysis of Education
  • I28 Education: Government Policy
  • O15 Economic Development: Human Resources; Human Development; Income Distribution; Migration