Handbook of Contemporary Education Economics
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Handbook of Contemporary Education Economics

Edited by Geraint Johnes, Jill Johnes, Tommaso Agasisti and Laura López-Torres

This Handbook provides a comprehensive overview of the modern economics of education literature, bringing together a series of original contributions by globally renowned experts in their fields. Covering a wide variety of topics, each chapter assesses the most recent research with an emphasis on skills, evaluation and data analytics.
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Chapter 12: Student achievement and costs in small schools

Patrice Iatarola and Leanna Stiefel


Reducing high school size is a popular policy in many large US school districts where high school graduation rates are low. Particularly in urban areas, the traditional large comprehensive high school increasingly has been unable to serve the needs of students at risk of educational failure who are predominantly racial and ethnic minority students as well as low income. In this chapter, following an historical review of three waves of small school reform efforts, we present theoretical and conceptual frames to orient theories of change, examine costs of reform, and assess system-wide effects. Early pre-2010 research studies, while plentiful, are largely correctional and ignore issues of selection that could bias findings. With advances in micro-level data availability as well as better designed analytic models, the rigor of research has grown. For example, recent studies that draw on school lotteries provide evidence that small schools lead to better student outcomes. These findings are supported by other rigorous research that captures heterogeneities between the earlier small schools and more recent ones. On the cost size, evidence dates back to the 1960s rooted in economic cost function research suggesting that the costs of small schools follows a typical U-shaped average cost curves, with a variety of cost minimizing sizes of schools. The next generation of cost research, still rooted in economic perspectives, suggests that there are economics to larger schools and that these differ across educational level and depend on how schools are utilized. The last wave of research on costs advanced both in terms of data and perspective such that costs were brought together with effects to shed light on whether investments in small schools were worth their extra costs in relation to effects. The evidence suggests that they are worthwhile investments though the rigour of the cost studies has not kept paste with that of the effects. Lastly, from our review there appears to be some positive systemic effects where students in both small and large schools have gains in achievement following significant small school reform.

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