Teacher Quality and the Teacher Labor Market

Torberg Falch and Bjarne Strøm

No 12631, CESifo Working Paper Series from CESifo

Abstract: Teachers matters for students' outcomes. This chapter summarizes the literature on the effect of teachers on student outcomes and considers teacher quality within the framework of the teacher labor market in terms of supply and demand. In practice, credible measurement of the quantitative importance of teachers is challenging to establish, and in particular what characterizes strong and weak teachers. The last years have witnessed an explosion of studies of teacher quality as a result of increased availability of longitudinal administrative data matching students, teachers and schools. Based on the education production function framework, we consider to what extent different research strategies are able to provide credible evidence on teacher quality. Estimated teacher effects on student achievement may reflect that some teachers are better at teaching to the test rather than generating true knowledge. Thus, we also discuss to what extent estimated teacher quality translates into education and labor market outcomes after students have left school, which illustrates the potential economic value of increased teacher quality. We discuss to what extent teacher quality is related to individual teacher characteristics and teacher labor market conditions. We also consider whether different policy reforms, such as increased teacher pay and decentralization of teacher wage setting, may improve teacher quality. Finally, we discuss the usefulness of using teacher quality measures in teacher evaluation systems, pay policies, and hiring processes.

Keywords: teacher quality; teacher labor market; student achievement; teacher pay policies (search for similar items in EconPapers)
JEL-codes: I20 I28 J24 J44 J45 (search for similar items in EconPapers)
Date: 2026
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