Do Smaller Classes Make a Difference and is it Cost Effective?

The Liberal Party proposal to reduce class sizes from about 30 to 21 in Years 4-6 in government schools will be popularly received. Reducing class sizes is one of the very few education policies that are widely endorsed by teachers and parents.

The Opposition is to be congratulated for committing a large funding increase for government schools. However, across the board reductions in class sizes are expensive and there are more cost effective ways to improve student outcomes.

ACT Budget Papers show that previous reductions in class sizes in the ACT for Years K-3 cost approximately $3.5 – 4 million per annum for each Year level. This suggests that the Liberal Party proposal will cost an additional $12 million per annum, or nearly $50 million over four years. There are also capital costs involved.

There is little doubt that class size reductions increase student achievement in some circumstances. The largest and best designed studies of class size reductions have found significant improvement in average student outcomes.

The Tennessee STAR Project and the Wisconsin SAGE Program in the United States found that class size reductions to 13 – 17 students in the early years of school increased student achievement. A large study done by the Institute of Education at the University of London found improvements from reducing class sizes from 30 to 20 in the first year of school.

Some critics say that the evidence for class size reductions is weak. For example, Eric Hanushek, Professor of Economics at Stanford University, argues that the gains in performance in the STAR Project were relatively small and that its methodology was flawed.

However, re-analyses of the STAR data have corrected its methodological problems. These studies by Alan Krueger, Professor of Economics at Princeton University, and by Harvey Goldstein, at the Institute of Education, confirm that small classes in the first years of school have a positive impact on student outcomes.

Despite these positive results there are reasons to look for more cost effective ways of improving student outcomes.

First, the size of the increase in student achievement appears to be fairly small. Goldstein’s review of the STAR results concluded the improvement was “modest”. Krueger’s review found that the gap between the average outcomes for the small classes and the standard classes is about 5 – 8 percentage points. The SAGE Project found gains of between 1.5 and 5 percentage points on average test scores for the smaller classes.

There is evidence that improving teacher quality contributes more to increasing student outcomes than class size reductions. Recent studies by Doug Harris and David Plank at Michigan State University and by Dylan Wiliam, Professor of Education at the Institute of Education, show larger improvements from increasing teacher ability and skills than by class size reductions.

Second, it may take very large reductions in class sizes and much higher costs to improve student outcomes. The STAR Project defined small classes as those with 13 – 17 students and the reduction was from 22 – 26 students. The SAGE Project set small classes at 15 students, well below the 21 proposed in ACT primary schools.

However, the Institute of Education study did find significant improvements from reducing class sizes to 20.

Third, most research studies focus on small classes in the early years of schooling. Much of the gains observed in the STAR, SAGE and the Institute of Education studies were obtained in the first year or two of school and by Year 3 additional gains were small or much reduced. For example, the SAGE Project found that smaller class sizes in Years 2 and 3 had a minimal impact on student achievement.

There is little evidence that small class sizes in Years 4 – 6 and in high school increase student achievement. A recent large study published by the Department for Education and Skills in England found that no evidence that Year 4-6 students in small classes achieved better results than students in larger classes.

A similar result was obtained from a study of upper primary classes in Connecticut by Caroline Hoxby at Harvard University, although the methodology of this study has been criticised.

Finally, practical difficulties such as recruiting sufficient qualified teachers may cause across the board class size reductions to fail to achieve their objective. This happened with the extensive class size reduction program in California in the 1990s.

The basis for an alternative approach is the almost universal finding of the research studies, even amongst the sceptics such as Hanushek, that economically disadvantaged and minority students gain the most from class size reductions. Their improvement is more than double that of other students.

These results point to more selective use of class size reductions by targeting them at schools with a high proportion of low income and minority students.

The ACT has amongst the highest average student outcomes in the world. Its major challenge is to reduce the large achievement gap between students from rich and poor families. Across the board reductions in class sizes is a very costly way to do this.

The more effective approach would be selective use of class size reductions combined with measures to improve teacher quality and provide additional learning support for students. What is the position of the other parties on this?

Trevor Cobbold

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