does size matter?

class size is now a political football in the NYC mayoral race, as this NY Sun article describes. but contrary to the experience of teachers, parents, and students, the bloomberg administration is arguing that reducing class size isn't all it's cracked up to be. this is a favorite argument among economists -- that when you reduce class size, the average quality of teachers goes down because you have to hire from deeper in the barrel:

"You can choose between the most sought-after master teacher in the school with 28 students, a competent but not inspiring teacher with 23 students, or a new teacher with 17 students in the class," [DOE deputy chancellor Carmen Farina] said. "I guarantee most parents would opt for no. 1."

but i wonder if anyone has done any research on correlations between class size andretaining new teachers (something NYC in particular has problems with). first-year teachers frequently have problems with discipline and classroom management. it would make sense to me that while a small class size policy may reduce the overall quality of teachers in the short term, it would improve in the long term. consider this an RFP. any takers?