Here's the comment I posted on gnxp.
Teacher quality does matter.
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.
From the underlying paper (pdf):
The results suggest that the effects of a costly ten student reduction in class size are smaller than the benefit of moving one standard deviation up the teacher quality distribution, highlighting the importance of teacher effectiveness in the determination of school quality.
Reading this, two comments occur to me immediately:
Is there a simple explanation of how they estimated the "teacher quality" variable? The paper is written in a very complicated and abstruse way, and I don't have time to wade through it, but surely the basic idea, if valid, should be explicable in a paragraph of plain English.
Even if we take the findings of the paper at face value, the "$100 trillion" estimate is a complete non sequitur. Can the entire effect really be purely because better teachers impart greater wealth-producing skills? Or could it be, at least partly, because they impart advantages in zero-sum signaling and rent-seeking games?
Post by fellow LW reader Razib Khan, who many here probably know from the gnxp site or perhaps from his debate with Eliezer.