The Impact of Better Teachers: $100 Trillion More in U.S. GDP

Forget the cliche of bringing an apple to your favorite teacher. You may want to send her your next bonus check instead -- because she's a big part of why you got it.

That's the gist of a recent report by the Cambridge, Mass.-based National Bureau of Economic Research (NBER) that attempted to measure the economic value of effective teachers compared to their less effective counterparts.

The study found that during the course of a school year, a student may learn as much as three times more material from a top-performing teacher as a similar student does from a bottom-performing teacher. And that extra learning translates to the bottom line once the student leaves school.

In fact, in one year, a well-above-average teacher -- in this case, one that's in the 84th percentile of effectiveness -- may lead to as much as $400,000 in additional lifetime earnings for her class of 20 compared to an average teacher, the NBER study said.

Add all of those students and school years up, and the numbers get astronomical, so much so that replacing the bottom 5% to 8% of teachers with merely average teachers would add a net value of as much as $100 trillion to the economy -- or about seven times the annual U.S. GDP -- and move the country to near the top of international science and math rankings in the process.

"Recent analysis has demonstrated a very close tie between cognitive skills of a country's population and the country's rate of economic growth," wrote Eric A. Hanushek, the Paul and Jean Hanna Senior Fellow at the Hoover Institution of Stanford University and author of the report. "In particular, countries that perform better on international math and science tests have stronger growth of their economies."

The Politics of Education

The study touches on a hot button of sorts because of political disagreements about the effectiveness 2001's Elementary and Secondary Education Act -- also known as "No Child Left Behind" -- that was originally signed by former President George W. Bush and more recently tweaked by President Barack Obama.

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Such standards-based education reform was spurred largely by Americans' slipping math and science scores relative to other industrialized countries. In 2009, U.S. students scored below average in math and about average in science among the more than two dozen industrialized nations that make up the Organization for Economic Cooperation and Development (OECD) in that group's Program for International Student Assessment (PISA). South Korea, Finland, Japan, Canada and the Netherlands were among the top performers in both subjects, while the U.S. was significantly further back in the pack, just behind nations such as Poland and Hungary.

Still, some educational experts say the study raises more questions than it answers. For one thing, the NBER report says the effect of a larger class size is far smaller than the quality of teacher, and that's been a point of contention among many educators.

Too Much Focus on Test Prep?

"At least one of their apparent statements -- that class size doesn't matter -- is false," says Douglas Fuchs, professor and Nicholas Hobbs Chair in special education and human development at Vanderbilt University's Peabody College. "And there is well-known research to back up the fact that it's false."

Additionally, by focusing strictly on test scores, education officials run the risk of encouraging teachers to cram test-specific information into their students instead of engaging in a discourse that keeps students interested in the curriculum, according to Michael Apple, the John Bascom professor of curriculum and instruction and educational policy studies at the University of Wisconsin.

"Schools are not simply places into which knowledge is poured into students' heads," says Apple. "This has led to some of the very worst practices associated with such failed policies as No Child Left Behind -- poor children doing nothing but 'test prep' and not getting a rich and interesting curriculum."

How to Reward the Best, Remove the Worst?

Finally, the NBER report merely studies the possible impact of effective teachers compared to ineffective ones, but it doesn't come up with a solution on how to properly compensate teachers according to performance. That's a major issue given that teacher salaries relative to their peers were at about the 35th percentile in 2000, down from about the 60th percentile in 1940, according to the study. In order for schools to be able to take a harder line approach to poorer-performing teachers, that trend would have to reverse before better teachers can be attracted into a profession with progressively less job security.

That said, the report's implication that officials need to find a better way to properly compensate the more-effective teachers while weeding out the worst ones may be valuable for a country looking to improve its own educational performance relative to its industrialized peers, according to Dominic Brewer, professor of education, economics and policy at the University of Southern California's Rossier School of Education.

"This is a credible study, and it points to some of the trade-offs that are often ignored," says Brewer, who agrees with the report's hypothesis that investing in teacher quality would be far more effective than spending money on cutting average class sizes.

"I would be wary of saying that if we simply got rid of X amount of teachers things would all work out," counters University of Wisconsin's Apple, noting that such an approach might be particularly risky in poorer, less-educated areas of the country. "This kind of statement lives in world divorced from the reality of schools, teachers, community and the ways in which economies work in places and whole communities where there are few if any jobs and opportunities."