Estimation of Class-Size Effects, Using 'Maimonides' Rule': The Case of French Junior High Schools

Using a rich sample of students from French junior high schools with a panel structure, we obtain small but significant and negative effects of class size on probabilities of educational success, in grades 6 and 7. An 8 to 10 student reduction of class size puts the child of a non-educated mother on an equal footing with the child of a college-educated mother. These effects vanish in grades 8 and 9. We use Angrist and Lavy's (1999) theoretical class size (i.e., "Maimonides' rule") as an instrument for observed class size. This is possible, due to availability of total high school and total grade enrollment in each year, in our exceptional data set. We control for father occupation, mother education and other variables. Using a Probit framework to model transitions from one grade to another (and thus grade repetitions), we simultaneously estimate the student's probabilities of success over 4 years in junior high school. This is done while allowing a general covariance structure of the error terms that affect latent student-performance variables and class-size auxiliary equations.