Class Size, Instruction Time and Central Exit Examinations : disentangling the Relative Contributions to Scholastic Achievement

We analyze the effects of instruction time and class size on student achievement in Germany. Using econometric evaluation techniques we are able to deal with unobserved heterogeneity in the student body. Specifically we apply first-difference methods and matching across subjects to control for overall student ability and specific skills. We find that an increase in class size reduces the performance of the students, while additional lessons improve the test score achievement. Both effects differ across federal states and individuals: Additional instruction time in states with central exit examinations enhances performance, while there is no effect in states without central exit examinations and more able students profit more from additional lessons as compared to their less able fellow students. We furthermore show that that reductions in class size accompanied by a decrease in instruction time can be a cost neutral instrument to raise student performance in states with central exit examinations.