The Effect of Class-size Reduction on Quality of Classroom Environment

This paper estimates the effects of class-size reduction on the quality of the classroom environment, exploiting the discontinuous variation in class size generated by Japan's statutory 40-student cap. A 10-student reduction improves composite indices of teacher-student relationships and classroom climate by 0.03–0.04 standard deviations respectively; school-reported discipline and violence also improve. Effects are stable across the pre- and post-COVID periods, concentrated in elementary grades, and largest where the prior classroom environment was weak, consistent with Lazear's disruption model. Effects on test scores are essentially zero. The benefits of smaller classes operate on the classroom environment rather than on academic achievement.