In this paper we analyse the sibling size and birth-order effect on educational achievement in Switzerland on the basis of PISA data. We find an overall modest size and birth-order effect. The sibling size effect, however, is a product of a substantial and significant negative size effect for families with lower socio-economic status and foreign origin and a positive sibling size effect in small, native families with a high socio-economic status compared to singlechild families with the same background. Thus, subgroups of the population seem to be confronted with binding budget constraints, although education is free. The hypothesis that parents of larger families spend on average less time with their children is also tested and shows the expected negative effect of the sibling size. We present an extended version of the sibling size model that can account for these effects and discuss the consequences these results might have for social and educational policy.