On Superstar Teachers and Compensation Schemes

by Reihan Salam

David Leonhardt has a new column the impact of effective kindergarten teachers on life outcomes for students, drawing on new research from a distinguished team of economists led by Raj Chetty, known for his path-breaking and policy-relevant work. 

Just as in other studies, the Tennessee experiment found that some teachers were able to help students learn vastly more than other teachers. And just as in other studies, the effect largely disappeared by junior high, based on test scores. Yet when Mr. Chetty and his colleagues took another look at the students in adulthood, they discovered that the legacy of kindergarten had re-emerged.

Students who had learned much more in kindergarten were more likely to go to college than students with otherwise similar backgrounds. Students who learned more were also less likely to become single parents. As adults, they were more likely to be saving for retirement. Perhaps most striking, they were earning more.

All else equal, they were making about an extra $100 a year at age 27 for every percentile they had moved up the test-score distribution over the course of kindergarten. A student who went from average to the 60th percentile — a typical jump for a 5-year-old with a good teacher — could expect to make about $1,000 more a year at age 27 than a student who remained at the average. Over time, the effect seems to grow, too.

We in the news media hunger for a blockbuster number, and Team Chetty gives us one:

Mr. Chetty and his colleagues — one of whom, Emmanuel Saez, recently won the prize for the top research economist under the age of 40 — estimate that a standout kindergarten teacher is worth about $320,000 a year. That’s the present value of the additional money that a full class of students can expect to earn over their careers. This estimate doesn’t take into account social gains, like better health and less crime.

The findings haven’t been published yet, and I imagine it will give us far more to chew over. For now, I have some tentative thoughts:

* Standout kindergarten teacher isn’t terribly specific — of the teachers in the survey, how many would be considered standouts? The study tracked 12,000 students. Roughly speaking, let’s say this amounts to 600 classrooms and 600 teachers. Were there 100 standouts? Or 10? I’d love to see the curve. Highlighting the standout teachers might give us a misleading picture of the scale of the challenge.

* How much is a standout parent worth? Some children wil generate a great deal of tax revenue over a lifetime. Should we, in light of this fact, give more generous tax subsidies to parents with the characteristics the best predict high future earnings for their offspring? I imagine the answer is no — this would strike most observers as unacceptably illiberal. But improving incentives for parents, as Robert Stein and Ramesh Ponnuru have recommended, seems like a pretty good idea.

Leonhardt offers a few immediate responses:

They can pay their best teachers more, as Pittsburgh soon will, and give them the support they deserve. Administrators can fire more of their worst teachers, as Michelle Rhee, the Washington schools chancellor, did last week. Schools can also make sure standardized tests are measuring real student skills and teacher quality, as teachers’ unions have urged.

Others are less nuanced than Leonhardt. Erik Brynjolfsson, an MIT economist I greatly admire, writes the following:

We would be better off if we paid our teachers a lot more, and attracted more of the best and the brightest to this profession.

Note that while Leonhardt suggests we pay our best teachers more, Brynjolfsson suggests that we pay all teachers a lot more. But again, how many teachers were standouts? And were the standouts drawn to the profession for the cash compensation? One can imagine compensating teachers by giving them more autonomy and flexibility, or by limiting the number of disruptive students. 

Rather than offer blanket pronouncements on how much teachers ought to be paid, we need to give more thought to allowing more business model innovation in the education sector. As new compensation schemes emerge, we’ll eventually learn more about what works and what does not.