Is a Good Teacher Worth $400,000?

Teachers, you may have a new bargaining chip

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Over the course of a school year, a good teacher produces $400,000 more in future earnings for a class of 20 students than an average teacher. What's more, replacing the worst-performing five to eight percent of teachers with average teachers could catapult the U.S. to near the top of international math and science rankings, padding GDP by $100 trillion and generating returns that dwarf "the discussions of U.S. economic stimulus packages related to the 2008 recession ($1 trillion)."

These are the findings of a National Bureau of Economic Research study by Stanford's Eric Hanushek, which investigates the interplay between teacher effectiveness and the economic impact of higher student achievement, specifically in terms of test scores.

Hanushek notes that one challenge his paper doesn't tackle is how to link pay to effectiveness; instead, the research "simply suggests that the economically appropriate rewards for particularly effective teachers in the context of a performance pay plan could be very large."

How are commentators receiving the findings?

  • There Are Two Ways to Interpret This Data, argues Adam Ozimek at Modeled Behavior. Studies like this show that teachers are valuable and that we should raise wages to attract better talent. But:

If good teachers are very valuable, then bad teachers are very costly. This means we should be willing to pay more for good teachers, but it also increases the benefit of getting rid of bad teachers and ensuring we have a system that can do that. After all, every dollar spent on a bad teacher has the high opportunity cost of good teachers. Findings like this tell us that we should place even less relative value on teacher well-being for it’s own sake (which is separate from teacher well-being to the extent that it improves outcomes) when considering reforms. I think this is something that some progressives aren’t as happy to hear, especially with regard to using the teaching profession as a middle class jobs program.

  • Shrinking Class Sizes Has Diluted Teacher Talent, asserts Reihan Salam at National Review:

Had we stayed at the teacher-student ratios of the 1970s, we'd have 2.2 million public school teachers rather than 3.2 million. Know what else happened over the last 40 years? Labor market discrimination against women and African Americans declined, giving talented female and African American workers who had once gravitated to the teaching profession other options. Allowing effective teachers to take on larger classes in exchange for more pay could have a powerful positive effect.

  • We Should Put The Findings In Context of Other Research, says Catherine Rampell at The New York Times. She mentions a recent study claiming that a strong kindergarten teacher is worth $320,000 a year based on the additional earnings that a class of students can expect to earn during the course of their careers.
  • Benefits of Above-Average Education Will Only Increase, states Derek Thompson at The Atlantic. In this "stratified, winner-takes-almost-all economy," he explains, "the middle class has hollowed out and earnings among the college-educated far outstrip high school graduates." Thompson also compares Hanushek's research to a 2009 McKinsey finding that if the American education system performed at the level of South Korea, the US economy would improve by a sixth of GDP, or more than $2 trillion.
This article is from the archive of our partner The Wire.