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The Economic Value of Higher Teacher Quality

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  • Eric A. Hanushek

Abstract

Most analyses of teacher quality end without any assessment of the economic value of altered teacher quality. This paper combines information about teacher effectiveness with the economic impact of higher achievement. It begins with an overview of what is known about the relationship between teacher quality and student achievement. This provides the basis for consideration of the derived demand for teachers that comes from their impact on economic outcomes. Alternative valuation methods are based on the impact of increased achievement on individual earnings and on the impact of low teacher effectiveness on economic growth through aggregate achievement. A teacher one standard deviation above the mean effectiveness annually generates marginal gains of over $400,000 in present value of student future earnings with a class size of 20 and proportionately higher with larger class sizes. Alternatively, replacing the bottom 5-8 percent of teachers with average teachers could move the U.S. near the top of international math and science rankings with a present value of $100 trillion.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 16606.

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Date of creation: Dec 2010
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Publication status: published as Hanushek, Eric A., 2011. "The economic value of higher teacher quality," Economics of Education Review, Elsevier, vol. 30(3), pages 466-479, June.
Handle: RePEc:nbr:nberwo:16606

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Citations

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Cited by:
  1. Galdo, Jose & Chong, Alberto, 2012. "Does the quality of public-sponsored training programs matter? Evidence from bidding processes data," Labour Economics, Elsevier, vol. 19(6), pages 970-986.
  2. Hanushek, Eric A. & Wößmann, Ludger, 2012. "Schooling, educational achievement, and the Latin American growth puzzle," Munich Reprints in Economics 20399, University of Munich, Department of Economics.
  3. MacLeod, W. Bentley & Urquiola, Miguel, 2012. "Competition and Educational Productivity: Incentives Writ Large," IZA Discussion Papers 7063, Institute for the Study of Labor (IZA).
  4. Gilpin, Gregory A., 2012. "Teacher salaries and teacher aptitude: An analysis using quantile regressions," Economics of Education Review, Elsevier, vol. 31(3), pages 15-29.
  5. van Elk, Roel & van der Steeg, Marc & Webbink, Dinand, 2011. "Does the timing of tracking affect higher education completion?," Economics of Education Review, Elsevier, vol. 30(5), pages 1009-1021, October.
  6. Jones, Michael D., 2012. "How do Teachers Respond to Tenure?," MPRA Paper 43893, University Library of Munich, Germany.
  7. Hart, Cassandra M. D. & Sojourner, Aaron J., 2014. "Unionization and Productivity: Evidence from Charter Schools," IZA Discussion Papers 7887, Institute for the Study of Labor (IZA).
  8. Josep-Oriol Escardíbul & Toni Mora, 2013. "Teacher gender and student performance in mathematics. Evidence from Catalonia," Working Papers 2013/7, Institut d'Economia de Barcelona (IEB).
  9. Cory Koedel & Mark Ehlert & Michael Podgursky & Eric Parsons, 2012. "Teacher Preparation Programs and Teacher Quality: Are There Real Differences Across Programs?," Working Papers 1204, Department of Economics, University of Missouri, revised 13 Jul 2012.

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