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 a 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 illustrate how consequential score manipulation can arise even in assessment systems with few accountability concerns.
Angrist, Joshua D., Erich Battistin, and Daniela Vuri.
"In a Small Moment: Class Size and Moral Hazard in the Italian Mezzogiorno."
American Economic Journal: Applied Economics,
Asymmetric and Private Information; Mechanism Design
State and Local Government: Health; Education; Welfare; Public Pensions
Analysis of Education
Returns to Education
Education: Government Policy
Human Capital; Skills; Occupational Choice; Labor Productivity
Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics