Objectives: We estimated the costs associated with reducing class sizes in kindergarten through grade 3 as well as the effects of small class sizes on selected outcomes such as quality-adjusted life-years and future earnings.
Methods: We used multiple data sets to predict changes in the outcomes assessed according to level of educational attainment. We then used a Markov model to estimate future costs and benefits incurred and quality-adjusted life-years gained per additional high school graduate produced over time.
Results: From a societal perspective (incorporating earnings and health outcomes), class-size reductions would generate a net cost savings of approximately $168,000 and a net gain of 1.7 quality-adjusted life-years for each high school graduate produced by small classes. When targeted to low-income students, the estimated savings would increase to $196,000 per additional graduate. From a governmental perspective (incorporating public expenditures and revenues), the results of reducing class sizes ranged from savings in costs to an additional cost of $15000 per quality-adjusted life-year gained.
Conclusions: Reducing class sizes may be more cost-effective than most public health and medical interventions.