Adam points us to the LA Times special series on teacher value add. This kind of coverage has economists on pins-and-needles because it addresses the very issues that we have struggled with for 40 years.

A particularly robust finding in economics is that unobserved teacher heterogeneity accounts for the lion’s share in educational value add. That’s a shamncy way of saying its all about the quality of teachers but for the life us we can’t figure out what makes good teachers good.

To that end some economists have proposed teacher tournaments. Its perhaps ironic given the differing political bases, but what economists are arguing is that teachers ought to be paid similar to corporate executives. Not similar in salary range perhaps but similar in terms of how compensation is structured.

In short corporate governance seems to matter but we can’t tell why or how or importantly predict which executives will be good or bad. So, what do we do?

We hire a bunch of smart kids and we say – go for it! Most of you will not make it, a good fraction of you may be fired or end up stuck in middle management, but those of you who survive will be rewarded handsomely. Its a survival of the fittest model that allows us to optimize without having any understanding whatsoever of the optimizing function. Its design sans intelligence. Which is important because the design matters but we are woefully lacking in intelligence.

How would such a system work – brutally, in short.

A simple example would be to take in teachers by cohort. Every year, fire the lowest 25% of the cohort. Do this for five years. You will be left with the top 24% fittest teachers. We can’t say they are the best teachers because that depends on the details of the measuring process and how you define best. However, we can say that these teachers have been selected for performance.

At the end of the five years you give the surviving teachers tenure. That is to say, as long they don’t screw up royally they have a job for life. This sounds like a big deal and to many working class people it would be. However, tenure by other names is par for the course in the professional world.

Such a system would undoubtedly be much harder on the teachers, however, it would necessitate much faster turnover, many more hires and one would predict larger salaries. The more intense a tournament, typically the larger the financial rewards for the winners.

Whether teacher tournaments would improve education in the kind of ways that parents and state governments want education improved is a complex issue. What we can say, is that tournaments are one of the few known ways to deal with unobserved heterogeneity.