This note implements two research designs that attempt to isolate the effect of class size on achievement. A first strategy focuses on variation in class size in rural schools with fewer than 30 students, and hence only one classroom, per grade. Second, an approach similar to Angrist and Lavy's exploits regulations that allow schools with more than 30 students in a given grade to obtain an additional teacher. Both designs suggest class size negatively affects test scores.

Two issues dominate the school choice de-bate: whether competition would make schools more productive, and whether choice would re-sult in sorting or stratification. In trying to an-swer these questions, economists have generally focused on the consequences of voucher sys-tems, yet inter-district or Tiebout choice is, and is likely to remain, the main form of school choice in the United States. Surprisingly, we know comparatively little about its effects. This paper focuses on whether inter-district choice leads to sorting, an issue on which there is no consensus. In recent work, for instance, Charles T. Clotfelter (1999) argues that district availability does influence chil-

This paper examines how schools' choices of class size and households' choices of schools affect regression-discontinuity-based estimates of the effect of class size on student outcomes. We build a model in which schools are subject to a class-size cap and an integer constraint on the number of classrooms, and higher-income households sort into higher-quality schools. The key prediction, borne out in data from Chile's liberalized education market, is that schools at the class-size cap adjust prices (or enrollments) to avoid adding an additional classroom, which generates discontinuities in the relationship between enrollment and household characteristics, violating the assumptions underlying regression-discontinuity research designs.

This paper applies a regression discontinuity design to the Romanian secondary school system, generating two findings. First, students who have access to higher achievement schools perform better in a (high stakes) graduation test. Second, the stratification of schools by quality in general, and the opportunity to attend a better school in particular, result in significant behavioral responses: (i) teachers sort in a manner consistent with a preference for higher achieving students; (ii) children who make it into more selective schools realize they are relatively weaker and feel marginalized; (iii) parents reduce effort when their children attend a better school.

Many programs reward or penalize schools based on students' average performance. Mean reversion is a potentially serious hindrance to the evaluation of such interventions. Chile's 900 Schools Program (P-900) allocated resources based on cutoffs in schools' mean test scores. This paper shows that transitory noise in average scores and mean reversion lead conventional estimation approaches to overstate the impacts of such programs. It further shows how a regressiondiscontinuity design can be used to control for reversion biases. It concludes that P-900 had significant effects on test score gains, albeit much smaller than is widely believed

Stratification is a distinctive feature of competitive education markets that can be explained by a preference for good peers. Learning externalities can lead students to care about the ability of their peers, resulting in across-school sorting by ability. This paper shows that a preference for good peers, and therefore stratification, can also emerge endogenously from reputational concerns that arise when graduates use their college of origin to signal their ability. Reputational concerns can also explain puzzling observed trends including the increase in student investment into admissions exam preparation, and the decline in study time at college.

We review the theoretical, computational, and empirical research on school vouchers, with a focus on the latter. Our assessment is that the evidence to date is not sufficient to warrant recommending that vouchers be adopted on a widespread basis; however, multiple positive findings support continued exploration. Specifically, the empirical research on small-scale programs does not suggest that awarding students a voucher is a systematically reliable way to improve educational outcomes, and some detrimental effects have been found. Nevertheless, in some settings, or for some subgroups or outcomes, vouchers can have a substantial positive effect on those who use them. Studies of large-scale voucher programs find student sorting as a result of their implementation, although of varying magnitude. Evidence on both small-scale and large-scale programs suggests that competition induced by vouchers leads public schools to improve. Moreover, research is making progress on understanding how vouchers may be designed to limit adverse effects from sorting, while preserving positive effects related to competition. Finally, our sense is that work originating in a single case (e.g., a given country) or in a single research approach (e.g., experimental designs) will not provide a full understanding of voucher effects; fairly wide-ranging empirical and theoretical work will be necessary to make progress.

Romanian households could choose schools with one standard deviation worth of additional value added. Why do households leave value added “on the table”? We study two possibilities: (i) information and (ii) preferences for other school traits. In an experiment, we inform randomly selected households about schools' value added. These households choose schools with up to 0.2 standard deviations of additional value added. We then estimate a discrete choice model and show that households have preferences for a variety of school traits. As a result, fully correcting households' beliefs would eliminate at most a quarter of the value added that households leave unexploited.

We examine student, teacher, and peer perceptions of effort, ability, performance, and self-confidence in Romania's highly tracked schools. We find that: (1) students just above a cutoff—tracked into high-achieving classes—have less favorable self-perceptions than those just below (“big-fish-little-pond” effects); (2) students perceive peers in their classes more favorably (“in-group bias”); (3) this bias is stronger in lower-achieving classes; (4) students perceive themselves more positively than others perceive them (“illusory superiority”); (5) this bias is stronger among lower-achieving students (“Krueger-Dunning effects”). In short, being tracked into lower-achieving classes does not appear to negatively affect self-perceptions.