The Effects of Class Size on Student Achievement in Higher Education: Applying an Earnings Function

This paper uses an earnings function to model how class size affects the grade students earn. We test the model using an ordinal logit with and without fixed effects on 363,023 undergraduate observations. We find that class size negatively affects grades. Average grade point declines as class size increases, precipitously up to class sizes of ten, and more gradually but monotonically through class sizes of 400 plus. The probability of getting a B plus or better declines from 0.9 for class sizes 20 to about 0.5 for class sizes of 120 and almost 0.4 for class sizes of 400