The emergence of large longitudinal data sets linking students to teachers has led to rapid growth in the study of teacher effects on student outcomes by economists over the past decade. One large literature has documented wide variation in teacher effectiveness that is not well explained by observable student or teacher characteristics. A second literature has investigated how educational outcomes might be improved by leveraging teacher effectiveness through processes of recruitment, assignment, compensation, evaluation, promotion, and retention. These two lines of inquiry are closely tied; the first tells us about the importance of individual teachers, and the second tells us how this information can be used in policy and practice. We review the most recent findings in economics on the importance of teachers and on teacher-related policies aimed at improving educational production.
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