DP11666 In a Small Moment: Class Size and Moral Hazard in the Italian Mezzogiorno

Author(s):	Joshua Angrist, Erich Battistin, Daniela Vuri
Publication Date:	November 2016
Keyword(s):	Education production, Regression Discontinuity, Test scores
JEL(s):	C26, C31, I21, I28, J24
Programme Areas:	Labour Economics, Public Economics
Link to this Page:	cepr.org/active/publications/discussion_papers/dp.php?dpno=11666

Instrumental variables (IV) estimates show strong class size effects in Southern Italy. But Italy's Mezzogiorno is distinguished by manipulation of standardized test scores as well as by economic disadvantage. IV estimates suggest small classes increase manipulation. We argue that score manipulation is a consequence of teacher shirking. IV estimates of a causal model for achievement as function of class size and score manipulation show that class size effects on measured achievement are driven entirely by the relationship between class size and manipulation. These results show how consequential score manipulation can arise even in assessment systems with few accountability concerns.