published in: European Journal of Political Economy, 2006, 22 (4), 944-968
We examine whether the sorting of differently achieving students into differently sized
classes results in a regressive or compensatory pattern of class sizes for a sample of
national school systems. Sorting effects are identified by subtracting the causal effect of class
size on performance from their total correlation. Our empirical results indicate substantial
compensatory sorting within and especially between schools in many countries. Only the
United States, a country with decentralized education finance and considerable residential
mobility, exhibits regressive between-school sorting. Between-school sorting is more
compensatory in systems with ability tracking. Within-school sorting is more compensatory
when administrators rather than teachers assign students to classrooms.
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