Thursday, July 29, 2010

The Long Run Effects of the Tennessee STAR Experiment

The Tennessee STAR experiment (where school children were randomly assigned to different class sizes) is one of the most well known RCTs in social science, and is frequently referenced on this blog. On his site, Greg Mankiw links to an article in the NYT which discusses new research by Chetty et al. Up to now STAR was mainly used to examine the effects of class size on test scores, with the conclusion generally being that the treatment (of smaller class size) had a contemporaneous positive effect on test scores, however this effect did not last beyond a couple of years. This phenomenon will be familiar from other early intervention studies such as the Perry Preschool programme, where test scores in the treatment group showed an initial jump before returning to the same level as the control group. The following graph is taken from James J. Heckman & Dimitriy V. Masterov, 2007.

So if you are just looking at school test scores, the impact of these types of interventions can be debatable. However the authors of this recent research are able to examine more long run effects by linking data on STAR participants (now adults, it was conducted in the 1980s), to tax records. Their conclusions appear to be (the link above is to a presentation, I look forward to reading the full paper) that the contemporaneous rise in test scores is a good measure of the effect of the treatment on adult outcomes. According to their analysis, class size and teacher quality have an important impact on adult earnings. Again, this mirrors the findings from the Perry Preschool programme (shown below), where despite the same "fade out" in test scores, a significant positive effect was found on adult outcomes.

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