Claremont Colleges Working Papers in Economics 1999-13
Using quantile regressions, this paper provides evidence that the relationship between school quality and wages varies across points in the conditional wage distribution and educational attainment levels. Although smaller classes generally have a positive return for individuals at high quantiles, they have a negative impact at low quantiles. Similarly, while more highly paid teachers benefit drop-outs at high quantiles and graduates at low quantiles, they have a negative return for all other quantile-education groups. The results presented in this paper also suggest that the optimal school for high school graduates is likely smaller than for high school drop-outs.