Teacher quality, skill premiums, and student outcomes

From The Economics of Teacher Quality by Darius Lakdawalla.

Concern is often voiced about the quality of American schoolteachers. This paper suggests that, while the relative quality of teachers is declining, this decline may be the result of technological changes that have raised the price of skilled workers outside teaching without affecting the productivity of skilled teachers. Growth in the price of skilled workers can cause schools to lower the relative quality of teachers and raise teacher quantity instead. Evidence from the National Longitudinal Survey of Youth demonstrates that wage and schooling are good measures of teacher quality. Analysis of U.S. census microdata then reveals that the relative schooling and experience-adjusted relative wages of U.S. schoolteachers have fallen significantly from 1940 to 1990. Moreover, class sizes have also fallen substantially. The declines in class size and in relative quality seem correlated over time and space with growth in the relative price of skilled workers.

There has been a paradox that real and relative investments in K-12 education have risen dramatically over the past fifty years, class sizes declined, schools have become more technology enabled, etc. and yet student outcomes in terms of subject proficiency and graduation rates have remained the same or declined. I have attributed this to the fact that we are now serving a much more diverse student body than in the past. There is a teaching burden that arises simply from the fact of diversity (variation has a cost), but there is also the nature of the diversity. 12% or more of children are now foreign born so they have the additional burden of language, economic transition (from agrarian to modern economies), and acculturalization that the schools have to address. The cost of variation and the cost of assimilation can be high.

My working hypothesis has been that the increases in investments have ended up being sufficient to cover the diversity costs (variation and assimilation) but not sufficient to then also raise outcomes as well.

What this article introduces is the idea that the relative quality of teachers has declined as well. There is a lot of nuance in here but I suspect that the authors are correct. They are arguing that as the economy has become far more complex and sophisticated, this has sucked high skilled people out of the teaching profession who have been replaced by lower skilled people who are compensated at relatively lesser amounts. This has been partially compensated for by increasing the numbers of teachers. So the question becomes one of trade-offs. Are 30 students being taught by an excellent teacher going to have better outcomes than 15 students taught by two mediocre teachers. I would say, indisputably the former scenario but that is contingent on some degree of cultural uniformity so that the teacher can focus on instruction rather than crowd control. Japanese teachers routinely instruct 30-40 pupils but they have the advantage of high cultural uniformity.

The synthesis of my operating assumption with the evidence of this article would be that over the past fifty years we have increased investments in education in general and teachers in particular, that that investment has been partially reflected in the continuing decline in student teacher ratios, that during that same time period, teacher quality has declined but quantity has increased, that diversity of the student body has increased (diversity in terms of variant behaviors, cultures, languages, etc.), that increased diversity has brought a burden of costs in terms of student management and in terms of student assimilation, and that increased education investments and teacher quantity have, because of declining relative teacher quality, only been able to maintain student outcomes, not improve them. The implications of this would be that to achieve increased student outcomes then, we would need to improve teacher quality and/or reduce student variation and/or find non-school means of improving assimilation and behavior consistency.