Sorry for joining this party late, but I just registered.
While doing research to run for school board a few years ago, I did a lot of searching to find studies showing the correlation between class size and results. The best information I could find at the time came to a logical conclusion: The younger the students, the more benefit came from smaller class sizes. In K through 2nd grade it was quite beneficial, the benefits were small until the child is about 10, then other factors begin to outweigh class size - factors like teacher competence, school environment, etc. Basically, from a policy standpoint, it makes sense to spend the extra money for small classes in the first few grades, but it is a waste of money beyond fourth grade, and high schoolers can learn in classes of up to 40 with no negative affects (assuming there are no major disciplinary issues in the class).
Also from a public policy standpoint, the slogan, "smaller class sizes" becomes a bottomless pit of spending. What do you do when your Teacher to student ratio is 20 and results are still bad? Well, reduce class sizes further! ( which is extremely expensive).
California started a major initiative several years ago to reduce class sizes state-wide, and I believe they abandoned it for both financial reasons and because it was getting no results whatsoever.