Teacher Quality and Cross Country Differences in Student Achievements

This paper proposes and calibrates a micro-founded theoretical model of teacher selection for a panel of 22 OECD countries. Based on the model, I build time series of teacher quality (TQ) for each country, analyse its main... [ view full abstract ]

This paper proposes and calibrates a micro-founded theoretical model of teacher selection for a panel of 22 OECD countries. Based on the model, I build time series of teacher quality (TQ) for each country, analyse its main drivers and study the importance of TQ in explaining differences in student achievements. In equilibrium the relationship between teacher salaries and TQ is non-lineal and maybe non-monotonic which help us to understand the ambiguous findings in the empirical literature between teacher salaries and student achievements. My proposed measure of TQ is strongly positively correlated with cross-country dispersion in student outcomes, even controlling for student and school characteristics, family background, macroeconomic context and unobservable country fixed effects. The counterfactual exercise shows that cross-country differences in TQ explains approximately 22% of the observed cross-country variance in students outcomes, its effect is quite similar to the family background effect. Initial distributions of population skills are crucial to determine current differences in TQ across countries, while teacher salaries and labour market conditions are of lesser importance.