In arguing for increased federal transfers to state and local governments, Harvard economist and former OMB official Jeffrey Liebman writes in today’s Wall Street Journal:
Economists Raj Chetty, John Friedman and Jonah Rockoff have shown that in a single year of teaching a great teacher raises the lifetime earnings of her students by $250,000 relative to an average teacher—so laying off some of our most promising teachers is tragic.
Liebman’s claim is mistaken for several reasons:
First, given the “last in, first out” policies imposed by most teacher unions, layoffs are made without regard to teacher quality. To his credit, Education Secretary Arne Duncan has pushed schools to enact more rational personnel policies, but those aren’t going to change overnight. So spending more federal money to avoid teacher layoffs wouldn’t give us more of the best teachers; we’d simply get more of what we’ve got.
Second, there’s a much easier way to get the same gains for students that Liebman cites, and it’s free: Lay off the worst teachers.
The reason is that Liebman’s reference to the Chetty, Friedman, and Rockoff article isn’t quite right. What they really say is that “Replacing a teacher whose [value added] is in the bottom 5% with an average teacher would increase the present value of students’ lifetime income by more than $250,000.” Liebman’s description of Chetty et al’s results isn’t incorrect, since the positive effects of good teachers appear to be equivalent to the negative effects of having a bad teacher.
Letting go of the worst teachers and shifting their students into other classrooms would cut school’s labor costs by roughly 5 percent. With 3 million teachers nationwide earning total salaries and benefits of around $100,000 each, that’s some serious cash. And according to the study Liebman cites—which has been supported by other articles—doing so would significantly increase student’s future earnings.