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Arnold Kling asks why economists think they can improve educational outcomes by firing the worst teachers (a position he labels E) but none of us think that we could improve financial performance by firing the worst financial managers (a proposition he labels F).
Both (E) and (F) are false, but economists have much softer priors about (E). That is, economists are strongly inclined to believe that outstanding performance in money management is luck. As a result, when someone claims to find something like (F), you can be sure that a significant effort will be expended on research designed to disprove that finding. On the other hand, economists would, if anything, like to believe (E), so that when someone claims to find something like (E), relatively little effort is expended trying to disprove that finding.
On a basic level the difference , somewhat reflected in Arnolds third option, is that economists believe that we know up front who the best or worst teachers are going to be over the next five years. Its the teachers who were the best or worst over the last five years. That is, economists believe individual teacher quality explains a huge fraction of the variation in student outcomes.
However, economists don’t believe that we can pick the best or worst financial managers over the next five years, just by looking at the best or worst from the preceding five years. That is, economists tend to think luck is the primary determinant of financial returns.
Now, admittedly Warren Buffet is an embarrassing counterexample for the luck hypothesis. On the other hand Merton and Scholes really looked like the smartest guys in the room until Long Term Capital blew-up in everyone’s faces. Moreover, Buffet’s legendary status makes him the exception that confirms the rule.
More deeply, economists argue that the most sensible way to invest is to simply buy a weighted average of all investment vehicles based on your risk tolerance.
Yet, few of us believe that the most sensible education is simply to take a weighted average of all currently used curricula and methods.
From a new NBER working paper by Eric Hanushek comes this shocking abstract:
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.
There are really two important claims here. I think progressives tend to be very pleased with claims like the first one, which is that teachers have a very high value. You can find similar results in the work of Raj Chetty, which suggests that good kindergarten teachers are worth $320,000. If this is true then the marginal benefit of teaching skill -or quality, if you want to think of it that way- is far below the marginal cost, and therefore we should increase wages to draw more talented teachers.
However, the second claim is just as important and is suggested by, although not a necessary condition of, the first: 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.
Overall though these results reinforce one fact that progressives and conservatives should agree on: this is a really important issue.
Reihan Salam has a criticism of education policy expert Diane Ravitch that I will nominate for Blog Post of the Quarter, at least. Reihan charges Ravitch of making crude simplifications and showing overall poor analysis. This is something I’ve written about before, and quite frankly I’ve been waiting for someone with more subject knowledge than me to write exactly what Reihan has written. While there are many points Ravitch makes and Reihan dissects, the central disagreement is this: Ravitch says that the real problem with education is poverty, Reihan says that while poverty is a real problem and it has an impact on educational outcomes, there are a lot of other things we can improve in our education system that will make real differences.
To take but one example, here is Reihan countering the claim that if public schools had the same classroom sizes as they do in the Harlem Children Zone they would do as well or better:
…on the class size point, note that Shanghai, the PISA outlier this year, finds that the average class size in Shanghai is 35. That is, students in Shanghai are achieving the best educational results in the world with a teacher-student ratio of 1:35, not the 1:7.5 that Ravitch cites as the source of the success of HCZ. One has to assume that the push for smaller class sizes has helped dilute the teacher talent pool in the United States. This doesn’t mean that larger class sizes are necessarily the right answer. But it does at least suggest that Ravitch’s analytical framework is decidedly imperfect.
That Ravitch’s “analytical framework is decidedly imperfect” is, I think, the key takeaway from Reihan’s piece.
I’d like to counter one common point that Reihan quotes Ravitch making:
Instead we’re creating a revolving door where we say if you’re no good, you’re out and let’s bring in Teach For America. They’ll send in 8,000 kids to stay for two years and then they’re gone. This is no way to build a profession.
A 2008 study by Morgaen Donaldson on Teach for America has some useful numbers on this subject. Contra Ravitch, 61% of TFA recruits are teachers for longer than the required 2 years, and 24% stay teachers for at least 6 years. While this may seem low, remember that 40-50% of all teachers leave the profession within the first 5-6 years. In addition, 15% of teachers in low income schools leave those schools annually.
These number show that, as Ravitch well agrees, the status quo for attrition in public schools is not so great. So to point to tenure choices of TFA teachers as unbecoming of the profession, when those teachers are actually less than twice as likely to leave the profession in the first 6 years relative to all public school teachers, is an exaggeration.
There is a lot more in Reihan’s piece and you should really read the whole thing if you care about education reform. I’d like to see a back and forth between Reihan and Dana Goldstein on Ravitch and her analysis of the education system.