In this paper, we compare subjective principal assessments of teachers to the traditional determinants of teacher compensation - education and experience - and another potential compensation mechanism – value-added measures of teacher effectiveness based on student achievement gains. We find that subjective principal assessments of teachers predict future student achievement significantly better than teacher experience, education or actual compensation, though not as well as value-added teacher quality measures. In particular, principals appear quite good at identifying those teachers who produce the largest and smallest standardized achievement gains in their schools, but have far less ability to distinguish between teachers in the middle of this distribution and systematically discriminate against male and untenured faculty. Moreover, we find that a principal’s overall rating of a teacher is a substantially better predictor of future parent requests for that teacher than either the teacher’s experience, education and current compensation or the teacher’s value-added achievement measure. These findings not only inform education policy, but also shed light on subjective performance assessment more generally.
We would like to thank Joseph Price and J.D. LaRock for their excellent research assistance. We thank David Autor, Joe Doyle, Sue Dynarski, Amy Finkelstein, Chris Hansen, Robin Jacob, Jens Ludwig, Frank McIntyre, Jonah Rockoff, Doug Staiger, Thomas Dee and seminar participants at UC Berkeley, Northwestern, BYU, Columbia, Harvard, MIT and the University of Virginia for helpful comments. All remaining errors are our own. Jacob can be contacted at: John F. Kennedy School of Government, Harvard University, 79 JFK Street, Cambridge, MA 02138; email: firstname.lastname@example.org. Lefgren can be contacted at: Department of Economics, Brigham Young University, 130 Faculty Office Building, Provo, UT 84602-2363; email: email@example.com. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.