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Class size: reducing average class size by one student in grade 2

Pre-K to 12 Education
Benefit-cost methods last updated December 2024.  Literature review updated January 2013.
This program was archived December 2024.
Washington State's prototypical school funding formula allocates funding for an average class size of 25.23 students in grades K–3 (RCW 28A.150.260). We estimate the benefits and costs of reducing 2nd grade average class sizes by one student.
 
ALL
BENEFIT-COST
META-ANALYSIS
CITATIONS
For an overview of WSIPP's Benefit-Cost Model, please see this guide. The estimates shown are present value, life cycle benefits and costs. All dollars are expressed in the base year chosen for this analysis (2022).  The chance the benefits exceed the costs are derived from a Monte Carlo risk analysis. The details on this, as well as the economic discount rates and other relevant parameters are described in our 2023 Technical Documentation.
Benefit-Cost Summary Statistics Per Participant
Benefits to:
Taxpayers $211 Benefits minus costs $596
Participants $493 Benefit to cost ratio $3.41
Others $263 Chance the program will produce
Indirect ($123) benefits greater than the costs 70%
Total benefits $843
Net program cost ($247)
Benefits minus cost $596

Meta-analysis is a statistical method to combine the results from separate studies on a program, policy, or topic to estimate its effect on an outcome. WSIPP systematically evaluates all credible evaluations we can locate on each topic. The outcomes measured are the program impacts measured in the research literature (for example, impacts on crime or educational attainment). Treatment N represents the total number of individuals or units in the treatment group across the included studies.

An effect size (ES) is a standard metric that summarizes the degree to which a program or policy affects a measured outcome. If the effect size is positive, the outcome increases. If the effect size is negative, the outcome decreases. See Estimating Program Effects Using Effect Sizes for additional information on how we estimate effect sizes.

The effect size may be adjusted from the unadjusted effect size estimated in the meta-analysis. Historically, WSIPP adjusted effect sizes to some programs based on the methodological characteristics of the study. For programs reviewed in 2024 or later, we do not make additional adjustments, and we use the unadjusted effect size whenever we run a benefit-cost analysis.

Research shows the magnitude of effects may change over time. For those effect sizes, we estimate outcome-based adjustments, which we apply between the first time ES is estimated and the second time ES is estimated. More details about these adjustments can be found in our 2023 Technical Documentation.

Meta-Analysis of Program Effects
Outcomes measured Treatment age No. of effect sizes Treatment N Effect sizes (ES) and standard errors (SE) used in the benefit-cost analysis Unadjusted effect size (random effects model)
First time ES is estimated Second time ES is estimated
ES SE Age ES SE Age ES p-value
High school graduation
On-time completion of high school with a diploma (excluding GED attainment).
 7 77 1000 0.005 0.004 7 0.005 0.004 18 0.005 0.204
Test scores
Standardized, validated tests of academic achievement.
7 77 1000 0.010 0.009 7 0.005 0.005 17 0.010 0.286
1In addition to the outcomes measured in the meta-analysis table, WSIPP measures benefits and costs estimated from other outcomes associated with those reported in the evaluation literature. For example, empirical research demonstrates that high school graduation leads to reduced crime. These associated measures provide a more complete picture of the detailed costs and benefits of the program.

2“Others” includes benefits to people other than taxpayers and participants. Depending on the program, it could include reductions in crime victimization, the economic benefits from a more educated workforce, and the benefits from employer-paid health insurance.

3“Indirect benefits” includes estimates of the net changes in the value of a statistical life and net changes in the deadweight costs of taxation.
Detailed Monetary Benefit Estimates Per Participant
Affected outcome: Resulting benefits:1 Benefits accrue to:
Taxpayers Participants Others2 Indirect3 Total
High school graduation Criminal justice system $1 $0 $3 $1 $5
Test scores Labor market earnings associated with test scores $209 $493 $260 $0 $962
Program cost Adjustment for deadweight cost of program $0 $0 $0 ($124) ($124)
Totals $211 $493 $263 ($123) $843
Click here to see populations selected
Detailed Annual Cost Estimates Per Participant
Annual cost Year dollars Summary
Program costs $198 2011 Present value of net program costs (in 2022 dollars) ($247)
Comparison costs $0 2011 Cost range (+ or -) 0%
The cost estimate accounts for state and school district teacher compensation, marginal operating, and capital costs. Annual teacher costs are calculated using the 2011-12 average total (state and local) salary for Washington certificated teachers reported in the Office of Superintendent of Public Instruction School District Personnel Summary Profiles. The calculation includes salaries and benefits as well as central administration and special education costs. Assumptions for capital cost calculations were provided by legislative staff, with one exception: the interest rate on bonds is from the Federal Reserve's November 2012 state and local rate. Aos, S., & Pennucci, A. (2013). K–12 class size reductions and student outcomes: A review of the evidence and benefit-cost analysis (Doc. No. 13-01-2201). Olympia: Washington State Institute for Public Policy.
The figures shown are estimates of the costs to implement programs in Washington. The comparison group costs reflect either no treatment or treatment as usual, depending on how effect sizes were calculated in the meta-analysis. The cost range reported above reflects potential variation or uncertainty in the cost estimate; more detail can be found in our 2023 Technical Documentation.
Benefits Minus Costs
Benefits by Perspective
Taxpayer Benefits by Source of Value
Benefits Minus Costs Over Time (Cumulative Discounted Dollars)
The graph above illustrates the estimated cumulative net benefits per-participant for the first fifty years beyond the initial investment in the program. We present these cash flows in discounted dollars. If the dollars are negative (bars below $0 line), the cumulative benefits do not outweigh the cost of the program up to that point in time. The program breaks even when the dollars reach $0. At this point, the total benefits to participants, taxpayers, and others, are equal to the cost of the program. If the dollars are above $0, the benefits of the program exceed the initial investment.

Citations Used in the Meta-Analysis

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Washington State Institute for Public Policy (2013). The Institute’s state-level fixed effects analysis of NAEP and CCD data is reported in this Technical Appendix.

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