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This paper analyzes data on 11,600 students and their teachers who were randomly assigned to different size classes from kindergarten through third grade. Statistical methods are used to adjust for nonrandom attrition and transitions between classes. The main conclusions are (1) on average, performance on standardized tests increases by four percentile points the first year students attend small classes; (2) the test score advantage of students in small classes expands by about one percentile point per year in subsequent years; (3) teacher aides and measured teacher characteristics have little effect; (4) class size has a larger effect for minority students and those on free lunch; (5) Hawthorne effects were unlikely.
Alan B. Krueger (Sat,) studied this question.