IN A RECENT PUBLIC AGENDA SURVEY, PARENTS OF PUBLIC HIGH-SCHOOL students supported the idea that reducing class sizes was a better way to improve schools than raising salaries for teachers. More stunning, however, was the survey's finding that public high-school teachers felt the same way. This widespread support for class-size reduction has translated into legislative action at the state and federal levels. As early as 1984, Texas placed a cap of 22 students on classes in the early grades. Within the next 12 years, Nevada, Virginia, California, Indiana, and Tennessee followed suit. Efforts at the state level have been supported by the Clinton administration's class-size reduction program, passed in 1998, which was to fund the hiring of around 29,000 new teachers during the 1999-2000 school year alone. While the Bush administration has retreated somewhat, its "No Child Left Behind Act" does provide states with block grants that can be used for class-size reduction.
With so much activity surrounding the issue of class size, one would think that the American education system were facing an unprecedented crisis of overcrowded classrooms and harried teachers. However, from a historical perspective, class-size reduction is a remedy in search of a problem. Between 1955 and 1995, the ratio of students to teachers in elementary and secondary schools fell from 26.6 to 15 students per teacher, a 40 percent decline (see Figure 1).The decline of the student/teacher ratio was steady across the 40-year period; moreover, as economists Eric Hanushek and Steven Rivkin have found, it was mainly growth in the pool of mainstream teachers, rather than those of administrators or special-education teachers, that accounted for the decline.
In fact, the real crisis seems to lie not in swelling class sizes, but in teachers' dwindling relative pay. Male teachers born around 1900 could expect to earn 45 percent more than the average worker; by contrast, those born around 1950 could expect to earn 8 percent less. Female teachers experienced an even larger decline in their relative pay. In the past half century, schools appear to have shifted their resources into hiring more teachers and paying them lower salaries.
How to explain such relentless reductions in class size, especially when they seem to be at the expense of teacher pay? My research suggests that the trends in teacher quantity and pay are driven by the nature of technological progress in the larger economy. To understand how this might work, suppose that the knowledge used by skilled workers outside teaching, such as doctors or engineers, is improving as a result of innovation. This would raise the productivity of skilled nonteachers, thereby raising the price of skilled labor. However, suppose that the general knowledge transmitted by schoolteachers, such as reading or arithmetic, remains largely unchanged and that the productivity of teachers remains constant as a result, Now schools must pay higher prices for skilled teachers, but they do not receive higher productivity in return. Faced with this situation, schools will respond by lowering the quality of teachers relative to workers in other professional occupations and raising the quantity of teachers e mployed. The relative quality of teachers falls precisely because the economy is healthy enough to drive up the demand for educated workers, In a sense, high teacher quality inevitably becomes a victim of its own educational successes.
According to this theory, the declining relative pay of teachers reflects a concurrent decline in relative teacher quality. As teacher quality becomes more expensive, schools use less of it. Reducing class size emerges as a cheaper way to boost achievement than raising teacher quality.
This also helps to explain a puzzling feature of U.S. achievement data in the postwar period. Since teaching seems to be skill-intensive, the increase in the relative price of skilled workers has raised the overall cost of education, This may be why real costs per student have increased substantially (nearly doubling in the past 30 years) while the performance of schools, as measured by average student achievement, has not risen at all. …