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

Miguel Urquiola () and Eric Verhoogen ()

American Economic Review, 2009, vol. 99, issue 1, 179-215

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)

JEL-codes: D12 I21 I28 O15 (search for similar items in EconPapers)
Date: 2009
Note: DOI: 10.1257/aer.99.1.179
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Working Paper: Class Size and Sorting in Market Equilibrium: Theory and Evidence (2007) Downloads
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