I know from my own educational experience that teachers differ in quality and that a good teacher improves the life prospects of his or her students, and that, as Becker says, usually it’s easy to distinguish good from bad teachers ex ante, that is, before the actual impact of the teachers on their students’ lives can be assessed. Everyone knows all this; the question is what to do with this knowledge in order to improve life prospects.
At the risk of sounding retrograde and unimaginative, I suggest that the only worthwhile reforms of teacher compensation are raising teacher wages uniformly, providing recognition and modest bonuses for outstanding teachers, and increasing hiring standards. The first two suggested reforms are essential because without them the third will have little or no effect on teacher quality. Per-pupil costs in American schools are high by international standards, it is true, seemingly without much to show for the high costs; but teacher salaries have to be raised in order to attract more good teachers because American women today have so much better alternative job opportunities than they used to have.
I don’t think varying salaries on the basis of measures of teacher quality are a feasible reform. My reasons for this pessimistic judgment are several. First, teaching below the college level tends not to be attractive to competitive people. I happen to have a job, as a federal court of appeals judge, in which everyone is securely tenured and paid the same salary, even though the judges vary in ability, experience, and effort. There are many jobs of that sort, they have their pluses and their minuses, and it would be a mistake to think that all such jobs would be performed better if they were restructured along the Darwinian lines that prevail in business. It’s a mistake to think that everyone is a natural risk taker. Tenure, a wage that varies with seniority rather than measured output, and long summer vacations create a compensation package that is attractive to a certain kind of person.
Second, while in a sample of millions, as in the study by Chetty et al. that Becker cites, it may well be inferrable, as the study finds, that teachers vary in the value they add to their students, within an individual school such an inference will be very difficult to draw. The average IQ and home environment of students in different classes may differ significantly, random factors may affect their future success, and there can be spillover effects from other classes. Suppose for example that a mediocre teacher teaches English, and a superb teacher teaches the same students history. Both teachers require essays. The superb teacher improves the students’ writing skills, and that in turn improves their performance in their English class, making the English teacher look better than he or she really is.
Third, and related, varying teachers’ salaries by some output measure will induce all sorts of wasteful strategizing—office politics—what organization economists call “influence activities,” an aspect of agency costs—by teachers hoping to get a good quality rating. They will angle to get the best students assigned to their classes, even when salary is tied to “value added,” as discussed by Becker, because smarter students are likely to improve more.
Fourth, although in principle the cost of higher salaries for the better teachers could be offset by reducing the salaries of the worse teachers, that is surely infeasible; so the Darwinian approach would cost more than the existing system, and maybe as much more as raising teacher salaries by a uniform percentage.
Finally, I am not clear what we should think the problem of American education (below the college level) is. Most children of middle-class (say upper quartile of households, income starting at $80,000) Americans are white or Asian and attend good public or private schools, usually predominantly white. The average white IQ is of course 100 and the Asian (like the Jewish) almost one standard deviation higher, that is, 115. The average black IQ is 85, a full standard deviation below the white average, and the average Hispanic IQ has been estimated recently at 89. Black children in particular often come from disordered households, which has a negative effect on ability to learn and perhaps indeed on IQ (which is only partly hereditary) as well. Increasingly, black and Hispanic students find themselves in schools with few white or Asian students. The challenge to American education is to provide a useful education to the large number of Americans who are unlikely to benefit from a college education or from high school courses aimed at preparing students for college. The need is for a different curriculum and for a greater investment in these children’s preschool environment. We should recognize that we have different populations with different schooling needs and that curricula and teaching methods should be revised accordingly. This recognition and response should precede tinkering with compensations systems.