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Can Small Class Policy Close the Gap? An Empirical Analysis of Class Size Effects in Japan

Can a smaller-class at school lead to a better educational outcome and more equality in achievement? We estimate the causal effects of class-size on achievement tests by using discontinuous changes in class-size under the Japanese public compulsory education system. We employ a value-added model using achievement test conducted at two different times during the same school year. Our results show a reduction in class-size has significant positive effects on Japanese language test scores in the sixth grade especially at schools in wealthy areas. That is, we find no evidence that a universal small-class policy closes the achievement gap among schools.