The external efficiency &eegr;dof quantum well (QW) lasers is maximum at some characteristic laser length, which is dependent upon mirror reflectivities and the number of QWs in the active layer. The observed decrease in &eegr;din short lasers is caused by increased optical absorption associated with a high concentration of free carriers in the QW and the surrounding waveguide layer. The carriers spill into the waveguide because of QW subband filling in short cavity lasers with high threshold gains.