How Much Is a Good Teacher Worth?

April 8, 2011

Student achievement, which provides a direct measure of later quality of the labor force, is strongly related to economic growth.  Improving achievement leads to a better-prepared workforce and to greater growth, and this growth translates into higher levels of national income.  So how much is a good teacher worth, asks Eric A. Hanushek, a senior fellow at the Hoover Institution.

Obviously, teacher quality is not the only factor that affects student achievement.  But researchers have consistently shown that the impact of a more-effective teacher is substantial. 

  • A high-performing teacher, one at the 84th percentile of all teachers, when compared with just an average teacher, produces students whose level of achievement is at least 0.2 standard deviations higher by the end of the school year.
  • In fact, the impact of having such a teacher could plausibly be as large as 0.3 standard deviations.

Approaching this valuation calculation from the perspective of the impact of teacher effectiveness on the U.S. economy as a whole, what would happen if the very lowest performing teachers could be replaced by just average teachers? 

  • Assuming the upper-bound estimate of teachers' impact, U.S. achievement could reach that in Canada and Finland (top performing countries on international tests), respectively, if we replaced the least effective 5 percent to 7 percent of teachers with average teachers.
  • Assuming the lower-bound estimate of teachers' impact, U.S. achievement could reach that in Canada and Finland, respectively, if we replaced the least effective 8 percent to 12 percent of teachers with average teachers.

Closing the achievement gap with Finland would, according to historical experience, increase the annual growth rate of the United States by 1 percent of gross domestic product.  Accumulated over the lifetime of somebody born today, this improvement in achievement would amount to nothing less than an increase in total U.S. economic output of $112 trillion in present value, says Hanushek.

Source: Eric A. Hanushek, "How Much Is a Good Teacher Worth?" Education Next, Summer 2011.

For text:

http://educationnext.org/valuing-teachers/

 

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