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1 of 21 Education Policy Analysis Archives Volume 8 Number 33July 17, 2000ISSN 1068-2341 A peer-reviewed scholarly electronic journal Editor: Gene V Glass, College of Education Arizona State University Copyright 2000, the EDUCATION POLICY ANALYSIS ARCHIVES. Permission is hereby granted to copy any article if EPAA is credited and copies are not sold. Articles appearing in EPAA are abstracted in the Current Index to Journals in Education by the ERIC Clearinghouse on Assessment and Evaluation and are permanently archived in Resources in Education Economic Perspectives on Investments in Teacher Qua lity: Lessons Learned from Research on Productivity and Human Resource Development Margaret L. Plecki University of WashingtonAbstractThis article reviews and critiques the ways in whic h researchers have used both productivity theory and human capital the ory in efforts to measure the returns on investments in improving tea cher quality. While studies utilizing these theories to measure investm ent returns provide useful insights, a critical need exists for researc h that advances our knowledge about the conceptual links between invest ments in teacher quality policies and improved student performance. The article also discusses several strategies for improving investig ations regarding the returns on investments in improving teacher quality including more refined measurement strategies, clearer conceptual frameworks, and a greater emphasis on resource re-allocation. Investing in improving the quality of teach ers and teaching is a central feature of many current education reform efforts at all levels of the policymaking system.
2 of 21Numerous calls for the improvement of teacher quali ty exist, and many states and local communities are targeting resources to ensure that all children have access to quality teachers. Many of the policy initiatives being cons idered require an increased level of investment in programs, training, and opportunities that support the ability of teachers to improve the level of student learning. Consequently expectations are also increasing that the new investments will result in positive an d enhanced outcomes for students. Policymakers bear a responsibility for the equitable and productive management of resources as they address questions of how to best support the improvement of the quality of teaching and learning. Difficult choices must be made regarding the distribution and use of a constrained set of resour ces targeted at improving teacher quality. Consequently, specific information about w hich improvement strategies hold promise can improve the understanding of the tensio ns and trade-offs that may exist under a particular set of educational conditions. At the core of investments in the quality o f teachers and teaching is some concept of teacher development. Either explicitly, or impli citly, policymakers presume that the resources they allocate purchase learning opportuni ties, offer incentives, and otherwise underwrite activities thatover timedevelop the ca pabilities of teachers. These capabilities are further assumed to be the most imm ediate "cause" of student learning. Across the span of a teacher's career, these accumu lating capabilities are likely to be associated with evidence of improved student perfor mance. This article reviews the contributions and the limitations of economic analyses of resource allocation policies aimed at improving tea cher quality. Two analytic frameworks taken from the study of the economics of education are employed in this review: productivity theory and human capital theor y. The article first summarizes results of various economic analyses of the product ivity of resources, and discusses the strengths and limitations of this approach for info rming questions about investments in teacher quality. Next, the aspects of human capital theory that are relevant to the issue of resource allocation for the development of teachers capabilities and careers are presented. These aspects are considered in addressi ng two teacher policy arenas in which resource allocation is a critical feature: teacher compensation and teacher professional development. The article concludes with considerati ons for policymakers when faced with resource allocation decisions regarding polici es aimed at improving teacher quality.Inquiry about productivity Let us first consider the premise that when policymakers decide how to best invest in strategies designed to support teacher developme nt, they are faced with the issue of educational productivitythat is, what results (e.g ., student achievement levels) are produced by investments in teacher development? Que stions such as the following are key considerations in policy debates: What are the best approaches for getting the most for our educational dollar? How do we best support teachers in a climate of increased standards and expectations for student learning? Ho w do we best reach the full spectrum of teachers and students in need of improvement? Wh at do we know about existing efforts to improve teacher quality? The answers to these questions are complex and variable. The nature and the extent of the educatio nal challenges differ in important ways at each level of the policymaking system (stat e, district, school, and classroom) and the specific conditions of students and teacher s within each level of the system vary considerably. Each question emphasizes the need to better understand whether or not we are utilizing resources devoted to teacher developm ent in the most efficient or equitable manner.
3 of 21 In order to wrestle with the notion of how productivity studies can inform teacher policy issues, we will briefly examine some of the existing research on productivity in education. A historical review of the literature in dicates that there has been considerable debate in the research community about the manner i n which increased spending on education may or may not be related to improved per formance (Hanushek, 1989; Murnane, 1991; Hedges, Laine & Greenwald, 1994; Bid dle, 1997: Ferguson & Ladd, 1996). However, this does not mean that inquiry reg arding productivity does not have value. Instead, understanding the nature of the con ceptual challenges involved in conducting such investigations of productivity may shed light on the strengths and weaknesses of any particular set of policy strategi es. That is, facing the difficulties of specifying the exact nature of the costs and benefi ts to be derived from a set of policies can provide valuable insights that might be used in the process of selecting from competing demands for resources. For the most part, studies of educational p roductivity have examined the relationship between the amount of money spent on v arious educational "inputs" and the levels of student achievement that are presumed to be associated with these inputs. These studies, typically referred to as education p roduction function research, derive much of their conceptual framework from the microec onomic theory of the firm (Benson, 1978). The production function model attem pts to analyze the relationship between inputs and outputs. The goal of this inquir y is to investigate the changes in output (typically measured by student achievement t est scores) associated with changes in the levels or mix of educational inputs (e.g., p er-pupil expenditures, teacher characteristics, and teacher-student ratios, with s ome statistical controls for variations in student background and family characteristics). Pro duction function research can also be viewed as an analytic frame in which cost/benefit a nalyses can be conducted. Several significant conceptual and technica l problems surface when attempting to apply a production function theory to educational p roductivity. Conceptually, the lack of agreement about the elements of a theoretically sou nd "theory of production" in education plagues the research in this area. In oth er words, unlike the microeconomic theory of the firm, the forces and conditions that comprise the human "equation" of student learning are neither obvious nor fully unde rstood. The lack of agreement is understandable, given that education is characteriz ed by interactive and developmental processes stretching across many years of schooling (Carroll, 1963; Mortimer et al., 1988). Given the lack of an agreed upon theory of e ducational production, it is little wonder that technical issues abound, such as the sp ecification and measurement of proxies to best represent the important elements in the educational process. Hence, the choice of inputs and their metric specifications ma y rest on other than strong theoretical grounds. Production function researchers typically choose particular input or output measures because information is readily available, the variable has some policy relevance, or because the variable is intuitively p lausible (Monk, 1990). Conceptual and technical problems notwithst anding, researchers have repeatedly used production function theory and techniques to e xamine the way investments may have affected educational outcomes. While the resul ts are mixed and in some dispute, they do offer insights into the relevance or impact of investments in teacher quality aimed at improving student learning. A seminal article on the subject of educati onal productivity (Hanushek, 1981) claimed that after reviewing 130 studies of educati onal productivity, no consistent, positive, significant relationships could be uncove red between increased spending on education and improved student achievement. Subsequ ent reviews by the same author (Hanushek, 1986, 1989, 1991) yielded the same gener al result. These analyses have been
4 of 21central to a continuing policy debate about whether dollars matter in the quality or improvement of education. A re-examination of Hanus hek's analysis of the literature, conducted by Hedges, Laine & Greenwald (1994), arri ved at a different conclusion: when alternative procedures for aggregating the res ults of separate studies are used, certain input measuresamong them, factors related to teacher qualitydo have a significant relationship to student outcomes. These authors found that teacher education, ability, and experience, along with small schools a nd lower teacher-pupil ratios, are all positively associated with student achievement. The difference in results is due to the use of an alternative methodology for conducting th e meta-analysis of the same literature. Others who have reviewed prior producti on function research (Ferguson & Ladd, 1996) claim that many of the earlier analyses did not critically sort out the methodologically weak studies from consideration, t hus casting doubt on the validity of the conclusions being drawn. Over the past two decades, there have been waves of productivity studies which have employed a more microanalytic approach using d isaggregated data (Murnane, 1975; Summers & Wolfe, 1977; Thomas & Kemmerer, 198 3; Brown & Saks, 1975; Rossmiller, 1986). These studies have focused on sc hool and classroom levels, in contrast to the more typical studies or analyses wh ich have used more global measures from macrolevel databases. Findings from the micr oanalytic studies reveal a similar pattern of mixed results. However, several producti on function studies in this tradition have demonstrated positive relationships between te achers' ability levels (usually a measure of verbal aptitude) and student achievement (Ehrenberg & Brewer, 1995; Summers & Wolfe, 1977). Ferguson (1991) examined sc hool districts in Texas and concluded that there are systematic relationships b etween educational inputs and student outcomes that he estimated to account for between o ne quarter and one third of student achievement differences. Ferguson & Ladd (1996) exa mined Alabama schools and concluded that there is evidence that the input var iables of teacher's test scores, the percentage of teachers with master's degrees, and s mall class size are positively associated with student test scores. The authors as sert that the use of more methodologically sound analytic techniques (e.g., v alueadded specification) combined with a more disaggregated analysis can address some of the perplexing problems which have been associated with production function resea rch. A recent multiple-method study by Darling-Hammond (2000), which examined relations hips between teacher quality and student achievement, yielded somewhat different res ults from those of Ferguson & Ladd. Darling-Hammond examined statelevel data from all 50 states and concluded that measures of teacher preparation and certification a re correleated with student achievement measures. One of the study's specific f indings was that state-level measures of the percent of fully certified teachers and a ma jor in their academic field is a stronger positive correlate of student achievement than the percent of teachers with a master's degree. Accompanying the ongoing search for empiric al relationships between inputs and outputs are doubts about the utility of the product ion function literature. Some argue that even when significant relationships are found betwe en input variables and student outcomes, these results do not have useful policy i mplications (Witte, 1990; Murnane, 1991). Others question the appropriateness of the s pecific variables being used and the limitations imposed by an almost exclusive focus on test scores as the measure of student outcomes (Smith, Scoll & Link, 1995). Furth ermore, results from the production function research studies which do not uncover a si gnificant relationship between increased spending and increased student outcomes c ollide with the widely-held, rather common-sense belief shared by many educators and po licymakers that increasing the
5 of 21level of investment makesor can makean important difference. Some researchers assert that insufficient attention paid to how additional dollars have been spent on education inputs may explain the apparent lack of c onnections between dollars and outcomes. For example, in an analysis of school dis trict spending in New York state (Lankford & Wyckoff, 1996) researchers found that a sizable portion of the increased resources were allocated to special education progr ams for the disabled. Given that student outcome measures for disabled students are often unavailable or excluded from aggregate data sets, it is likely that this aspect of increased spending is not accounted for in some of the production function research. Alternatives to the input-output predictive model for assessing educational productivity, noted in the literature, may hold pro mise for capturing more precisely how resource investments targeted to the quality of tea ching may translate into improvements in student learning. Barnett (1994) suggests that e mbedding production function and cost function studies in the theoretical model of privat e firms may not be appropriate for understanding how resources are allocated in public school systems. Alternatively, he suggests models which are derived from theories abo ut the bureaucratic behavior of government institutions (Nikansen, 1971) may more a ppropriately explain how educational resource allocation decisions are made and what impact these resources have. In this alternative view, the unit cost of th e school is determined by the available revenue, not by the most effective way to allocate revenue, and school administrators strive to maximize revenues and allocate resources to keep employees responsive and cooperative and maintain the school's reputation. H ughes, Moon & Barnett (1993) find that while resource allocation in schools is more c losely linked to funding those factors presumed to be related to quality or general school goals (e.g., better equipment and facilities, newer texts, additional support staff), these factors may not be directly linked to improved educational outcomes. To discover more direct links between resources and outcomes, a line of inquiry in educational producti vity research may be needed which elevates the importance of classroom-level analysis and complements the school-based studies (Monk, 1992; Rossmiller, 1986). Elmore (199 4) offers the observation that traditional budgeting practices in schools and scho ol districts are not centered on determining the actual costs of educational inputs, but rather focus on either adding or subtracting dollars from a baseline budget. He also notes that educators typically do not have any special training or background to assist t hem with the complex problems embedded in budgeting and improving productivity. O dden & Clune (1995) discuss several factors related to low productivity, includ ing a highly uneven distribution of resources across states, schools, districts, and st udents, unimaginative uses of dollars that do not translate into improved performance, an d a focus on additional programs rather than results. The authors cite several areas where additional productivity research might be extended: research on increased courseta king at the secondary level, examination of organizational strategies which are associated with improved performance, and research on high-poverty schools. The upshot of these lines of thinking and r esearch to date is that we know less about the productive impact of policymakers' invest ments in teacher development than we might wish. To be sure, some analyses highlight certain teacher-related variables (teachers' verbal ability, education, and years of experience) that appear to bear some relationship to student learning. Other studies est ablish no clear or discernible relationships. The lack of connections and the mixe d nature of results across studies may be due to the weaknesses in underlying theory or sp ecification of measures. Or, these models have yet to represent adequately important v ariables intervening between the allocation of resources and their enactment in prac tice. By a similar argument,
6 of 21production function models take little account of t he actual allocation and expenditure dynamics within public education bureaucracies, and hence we are unable to tell whether increased levels of resource investment overall wer e actually targeted to inputs of immediate relevance to improved classroom performan ce.Inquiry into human resource development The shortcomings of educational productivit y research lead one to consider other lines of economic analysis that are built on a more explicit theory regarding the improvement of teachers' capacity for their work. R esearch on policies that seek to develop and reward the "human resource" of the teac her force is particularly relevant. Research regarding the effective, efficient, and eq uitable use of human resources is a critically important area to investigate when consi dering policy options that are intended to support improved teacher quality. The bulk of op erating expenditures in education are allocated to pay for the cost of employing school p ersonnel, with the largest portion of those expenditures allocated to classroom teachers. Arguably, the quality of education is ultimately dependent on the classroom teacher's abi lity to produce educational outcomes. Two specific policy strategies for supporting teach er developmentteacher compensation and investments in ongoing teacher pro fessional developmentare conceptually linked to theories of human resource d evelopment. As a point of departure, we begin by outlining findings from research on hum an capital theory that are applicable to both teacher compensation and professional devel opment, and have contemporary significance in examining investments made in these two teacher development policy strategies. Human Capital Theory and the Development of Teacher s The examination of human resource developme nt has been a central area of study in the economics of education. One of the long-stan ding theories of human resource development, human capital theory, views human bein gs as individuals who possess great potential which can only be fully realized by making investments in human development. As far back as 1776, the publication o f Adam Smith's Wealth of Nations offered at least two insights into the nature of hu man capital that have applicability to the contemporary discussion of investing resources in teacher development. The first of these is the observation that labor inputs are not purely quantitative. Second, Smith observed that productivity is related to both "the quantity of the capital stock which is employed...and the particular way in which it is so employed." (Smith, 1776). These ideas suggest the importance of understanding both the "stock" and the "flow" of human resources (e.g., teacher's labor), as well as under standing the qualities of these resources. The evolution of human capital theory since Smith's time (Note 1) suggests that at least three elements are related to the quality and produ ctivity of human resources: the amount of human resources being employed, the quali ty of those human resources, and the way in which human resources interact in their employment. These central ideas of human capital theory shed light on the thorny problem of measuring human resources and assessing their effec ts. The measurement of labor quality has been a subject of investigation by many who study the economics of education. Benson (1978) is one of several experts in the economics of education who has noted that we typically use proxies to judge th e quality of labor inputs. He pointed
7 of 21out that education levels, degrees, and the acquisi tion of special credentialsthe most common proxies for labor qualityare commonly used across all types of labor markets. Employers value education levels, degrees, and cred entials because of a belief that these are acceptable proxies for valuable knowledge and s kills that render the worker more productive in a particular type of labor market. Proxies such as these have often been used to examine various policy strategies for improving teacher quality. We could reasonably asse rt that teachers who possesses higher levels of knowledge and skill in their craft will be associated with higher levels of productivity. While this assertion seems very obvio us, the process of identifying teachers who possess higher levels of knowledge and skill is far from obvious. As is true in most professional labor markets, we search for reasonabl e proxies for the knowledge and skill of teachers. In particular, scholarsespecially tho se engaged in productivity researchhave traditionally focused on years of exp erience in teaching, degrees and credentials earned, and levels of education and/or training beyond certification, often known as continuing education credits. Each of thes e proxies is typically associated with some type of resource allocation policy. By applying lessons learned from human capi tal theory, we can expect that these proxies are insufficient measures of teacher qualit y, and, consequently, investments aimed only at these proxies are likely to render va riable results. The proxies focus too much attention on quantity, are only loosely connec ted to quality, and to a large extent, ignore the matter of the way in which the resource is configured in its employment. Thus, the conceptual basis for measuring the relati on between the human resource inputs and the productivity of those inputs is quite weak. The perspective provided by the application of human capital theory is useful when considering resource allocation strategies for impr oving teacher quality. For example, investments which produce higher levels of educatio n, credentials, and/or training for teachers may result in increased productivity. Howe ver, the extent to which these investments pay off is dependent on the closeness o f the conceptual link between the types of education and training purchased and the k nowledge and skills needed and used in the classroom context. Keeping the perspective o f human capital theory in mind, we now consider two types of investments in teacher qu ality: professional development and teacher compensation. Investments in professional development Research on investments in professional dev elopment has tended to address a different set of questions than productivity studie s. Here, studies seek to answer two questions primarily: (1) who invests what in profes sional development? (2) what do these investments purchase? A more limited set of s tudies offer answers to a third question: how much and in what ways does profession al development (and, by implication, investment in professional development ) influence student learning? Virtually no studies address directly the question of the relation between investments of resources to support professional development and s tudent learning measures. Professional development for teachers has c onsisted of a myriad of activities and programs that are financed in a variety of ways fro m all levels of government. Several studies about the costs of staff development have b een conducted (Moore & Hyde, 1981; Lytle, 1983; Stern, Gerritz & Little, 1989; Elmore, 1997; Education Commission of the States, 1997) but an analysis of the available rese arch indicates that there is little generalizable information about the range of resour ces allocated for professional development (Orlich & Evans, 1990). Nonetheless, th ere are clear modal patterns
8 of 21regarding what these resources buy. One study found that teachers are two to three times more likely to be participants in a district-provid ed staff development than enrolled in a college or university course (Little, 1989). The sa me study also calculated that more than four-fifths of state dollars for staff development were controlled by the local district. A study by the Education Commission of the States (19 97) found that approximately three-fourths of school district resources designat ed for professional development are spent on teacher inservice days, conferences, and w orkshops. Professional development activities have be en dominated by a trainingbased delivery system, generally managed by school distri cts, which offers teachers a variety of workshops targeted on special projects or narrowly defined aspects of reform (Little, 1993). This type of packaged professional developme nt is not well suited to current educational reform purposes and ignores the opportu nities to learn that are part of the school organization (Hargreaves, 1990, 1993). Not s urprisingly, scholars have increasingly noted the need to have professional de velopment practices more crucially linked to the improvement of student performance (D arlingHammond & McLaughlin, 1995). The systemic reform initiatives during the past ten years have emphasized the importance of high standards for all students, a th inking-oriented curriculum, and performance-based student assessments linked to the standards (Resnick, 1993). Educational reform based on standards and performan ce-based assessment implies a focus on the development of new professional knowle dge and skills which teachers will need to produce an elevated level of student outcom es. The particular set of required knowledge and skills would vary by the context and conditions of the individual school setting (Cohen, McLaughlin &Talbert, 1993). Efforts underway by the National Board for Professional Teaching Standards and the Nationa l Commission on Teaching and America's Future are two examples of the types of e fforts underway to improve teacher recruitment, preparation, certification, continual development, and retention. Some efforts have been made to calculate th e costs of resources currently being devoted to the continuing education of teachers. Mi ller, Lord & Dorney's (1994) estimates range between 1.8% and 2.8% of the distri ct's operating budget. The cost per regular classroom teacher ranged between $1,755 and $3,259. Their study was based on a series of intensive case studies in four district s located in different regions in the U.S., ranging in size from 9,500 to 125,000 students. The estimates are based on direct costs such as the salaries of district and school adminis trators, and substitute teachers as well as on the direct costs of materials and supplies. O ne detailed study of staff development in California (Little et al., 1987) estimated the i nvestment in professional development to be almost two percent of total funding for educa tion in that state. In a study of one New York school district, Elmore (1997) estimated t hat spending on professional development amounted to about three percent of the total budget. One long-standing observation has been that school districts with mor e than one percent of its budget allocated to professional development is an excepti on (Darling-Hammond, 1994; Houston & Freiberg, 1979). These studies do not con sider, however, that most districts, somewhat due to the requirements of the bargained c ontracts with teachers, compensate teachers for staff development activities through a n increase in salary, thus representing a "hidden" cost of traditionally-delivered staff de velopment. For example, a study of spending on professional development in the Los Ang eles Unified School District (Ross, 1994) found that the district expended $1,153 milli on in teacher salaries in 1991-92, and that 22% of this figure could be attributed to sala ry point credits that were earned because of courses or other approved professional d evelopment activities on the part of teachers. The analysis goes on to call several of t he features of the salary point credit
9 of 21system into question and makes proposals for improv ing the current investment being made in teachers' professional development. As the example of investing in professional development through salary increments implies, there is a pronounced difficulty in fully accounting for all the costs incurred. Professional development activities frequently are financed through a combination of revenue sources, including non-governmental sources thereby complicating the cost accounting. Professional development experiences al so might be associated with substantial contributions of volunteer time on the part of teachers (Little et al., 1987). At the same time, teachers might accrue additional cre dits for professional development activities which advance them on the salary schedul e, resulting in a long-term fiscal obligation to the district in the form of the resul tant base salary increase. Finally, similar professional development activities might vary sign ificantly in costs per teacher depending on the financing strategy which is employ ed. For example, one strategy for supporting teacher professional development which i s increasing in popularity is the "early release" option in which students are releas ed from school on some regular basis, thereby allowing time during regular school hours f or teachers to engage in professional development. This option clearly is less costly for school districts, as it removes the additional costs of substitutes or additional hours worked by teachers. However, there is a significant opportunity cost borne by students in the form of reduced instructional time. The studies of professional development cos ts briefly reviewed above concentrate on the more traditional forms of professional devel opment delivery. However, significant changes have been taking place in recen t years regarding the conceptualization of effective teacher professional development (Fullan, 1993; Little, 1993; Smylie, 1995, Johnson, 1990; Corcoran, 1995), resulting in significant re-thinking of how professional development is best provided (N ational Foundation for the Improvement of Education, 1996; Darling-Hammond & B all, 1997). This re-conceptualization of professional development pr esents a number of conceptual and technical challenges for cost studies, (Note 2) inc luding methods for assigning costs to professional development activities which are integ rated into the instructional day and/or more informal interactions among teachers. Moreover recent thinking about professional development raises questions about whe ther investments in conventional staff development are likely to contribute much to improving the quality of teaching. Teacher compensation Historically, teachers have been compensate d for their efforts through a system which is based on an entry level salary. The base s alary is then augmented by increments on an established salary schedule based primarily o n years of teaching experience and levels of additional education (such as advanced de grees or credit for professional development activities). The level of teacher compe nsation is a perennial resource allocation question and is primarily determined by decisions about the salary schedule. While the argument can be made that raising compens ation levels will assist in attracting and retaining quality teachers, the traditional for m of teacher compensation, based on the two factors of years of experience and levels of ed ucation and training, does not provide the formula for producing the very best teachers. C onsequently, research on teacher compensation has attempted to uncover the types of incentive system that are more closely linked to improved quality of teaching and student learning.
10 of 21 In the past two decades, a variety of refor ms to the traditional system of teacher compensation have been attempted. During the early 1980s, merit pay was re-introduced as a policy alternative. In principle, merit pay in dividually rewards teachers based on the performance of their duties. Some merit pay plans p rovide for an individual financial bonus on a yearly basis, while other plans call for a permanent advancement on the salary schedule (Darling-Hammond & Berry, 1988). In many instances where they have been tried, merit pay systems have been abandoned, primarily due to internal dissension and problems determining who would receive the addi tional pay (Murnane & Cohen, 1986; Robinson, 1983). In addition to merit pay pro posals, the idea of teacher career ladders has been put forth as another type of alter native compensation strategy, but programs based on this idea have met with a similar lack of success (Freiberg & Knight, 1991; Bellon et al., 1989; Southern Regional Educat ion Board, 1994). Why have the various attempts at altering t eacher compensation borne so few fruitful results? One possible explanation is that the traditional salary structure provides for horizontal equity. That is, teachers are treate d as equals on the salary schedule regardless of their gender, race, or teaching assig nment (Protsik, 1996). This well-established practice provides for a uniformity of application across teachers that is resistant to change. Others assert that teachers ar e primarily motivated by intrinsic rewards that result from the process of working as a teacher (Lortie, 1975; Conley & Levinson, 1993; Richardson, 1990) rather than chang es in compensation rates. Firestone (1991) offers the view that research on merit pay h as not sufficiently considered the relationship between money and teacher motivation. Firestone distinguishes between merit pay systems (which reward some teachers for d oing essentially the same work better than other teachers) and job enlargement ref orms (which provide additional compensation to teachers for doing different work) and argues that job enlargement is more closely linked to teachers' intrinsic motivati ons. Another explanation is that prior reforms i n compensation have focused on individually-based rewards rather than rewards for group performance. An alternative approach to teacher compensation suggested by Mohrm an, Mohrman & Odden (1996) includes group-based performance rewards as well as skillbased and competency-based pay. The authors emphasize that the basis for deter mining the specific skills, competencies, and group rewards must be that the re wards support the central educational purposes of the school and are well sui ted to the type of organizational arrangements that define the particular site. Furth er work on the development of alternative designs for compensation systems that a re more tightly connected to school improvement have been advanced by Odden & Kelley (1 997). Finally, the work of the National Board for Professional Teaching Standards provides a basis for compensating teachers' knowledge and skills by demonstrating the achievement of higher levels of knowledge and expertise through the use of a rigoro us professional review process. Research also has been conducted regarding the alignment of compensation strategies with various education organizational de signs. Kelley (1997) noted that historically teacher compensation has been viewed a s separate from other aspects of reforming educational organizations. The author ana lyzes how compensation systems differ under four types of organizational models: s cientific management, effective schools, content-driven, and high standards/high in volvement and recommends that the design of teacher compensation systems should be be tter fitted to the type of organizational design which represents the school s etting in which teachers work, including the organization's structure, values, and goals. There are states (e.g., Kentucky and South Carolina) and local school systems (e.g., Dallas, TX; Charlotte-Mecklenburg, NC; and a very recent pilot program in Denver, CO) which are in the process of
11 of 21implementing alternative compensation plans. Places where alternative compensation plans have been developed and implemented have reli ed on participation by educational administrators, teacher unions, and community membe rs in the plan's design (Odden & Kelley, 1997). Investments in teacher compensation, as in teacher professional development, are policies which have been commonly employed in effor ts to improve teacher quality. Research on human resource development, particularl y that which is derived from human capital theory, indicates that the proxies wh ich have been used to capture important elements of teacher quality (e.g., verbal aptitude, degree earned, and years of experience) provide an incomplete picture of the fa ctors which affect teaching quality. Most of the research to date on human resource deve lopment in education has focused on tracking the quantity of particular inputs that are presumed to be positively associated with teacher quality. A critical need exists for re search which attempts to advance our knowledge about the conceptual links between invest ments in teacher professional development, teacher compensation, and improved tea cher and student performance. Implications for policy and research This review of economic perspectives from h uman capital and productivity theories has implications for the design and implementation of investment policies targeted at improving teacher quality. In this section, we expl ore some of the possible policy implications in an effort to stimulate thinking and dialogue among educators, researchers, and policymakers. How can we consider the knowledge gained fr om economic perspectives in its application to current policy debates about teacher quality? One set of observations about how we might characterize knowledge gained fr om economic research on productivity and human capital and their implicatio ns for policy is provided below. A significant challenge emerges from the la ck of a solid conceptual framework for understanding the important elements in the educati on process. The lack of sophisticated models for the assessment of student learning needs the application of teacher knowledge and skills in the instructional process, and the ways in which teachers enact a variety of resources to support instruction account s for some of the existing shortcomings of econometric analyses of productivit y. Many existing policy and resource allocation strategies for improving teache r quality are not theoretically linked to student outcomes. This lack of sufficient knowledge about how policies and resources are enacted by teachers to improve the quality of t eaching and learning is precisely the reason why it is so problematic to design cost-bene fit analyses of existing investments in teacher quality. Alongside the conceptual challenges, and in part derived from them, econometric perspectives on the productivity of investments in teacher development face a multitude of measurement challenges. First, and perhaps, most importantly, difficulties exist in specifying the student outcomes to be assessed. Whi le significant progress has been made in productivity research, primarily in microan alytic studies, we still face the question of how to improve on our measures of stude nt learning. Test scores provide an insufficient measure of the content, number, and ty pes of performances expected by the ambitious learning standards that the education ref orm efforts of this decade have promoted. Adding to the complexity is the extent to which the selected set of standards is universally applied (Monk & Rice, in press). Con sequently, analyses of the extent to which specific investments have resulted in improve d efficiency (that is, improved student learning according to the set of standards being addressed) are ultimately
12 of 21dependent on our ability to develop clearer, more a ppropriate outcome measures. In a similar vein, improvement also is needed in the pro xies we use for teacher quality. The typical proxies such as years of experience, scores on standardized tests of verbal ability, degrees and credentials earned, and academic field are insufficient indicators of teacher quality. However, current work on developing and im plementing teacher standards (such as the National Board for Professional Teaching Sta ndards and the INTASC standards) holds promise for the improvement of measurements o f teacher quality. The lessons learned from human capital theo ry, reviewed earlier, suggest that the quantity of a resource, the quality of a resource, and the ways in which a resource is configured in its employment are all important aspe cts of assessing the resource's productive potential. When we view the economic res earch on the relationship between resources, productivity, and teacher quality, we fi nd that tracking "investments" in teacher quality have been mostly limited to trackin g proxies for the quantity of a given resource. While economic theory acknowledges the di fference between the quantity and the quality of a given input, the research to date indicates that resource allocation strategies for improving teacher quality (1) overem phasize the effects of the quantity of resources, (2) give short shrift to the analysis of the effects of the quality of the resource, and (3) do little to illuminate the effects of re-c onfiguring or reallocating resourcesthat is, does not help us get at the alternative uses of the same resources. Current economic models for examining the effectiveness of resource allocation practices targeted at teacher quality help articulate the challenges we m ust face, but are insufficient in their current state to provide the types of analyses that policymakers might find most useful. In what ways might our conceptions of polic y aimed at improving the quantity, quality, and reconfiguration of resources for teach er quality be improved? We might begin by first assuming that productivity can be im proved through the re-allocation or re-configuration of existing resources. In other wo rds, if we were to hold the overall quantities of resources constant, then we might foc us more centrally on how the resources are allocated and used. There is a little research in this area, but recent work has pointed to the positive contributions and the e fficiencies associated with redesigning resource allocation practices (Miles & Darling-Hamm ond, 1998; Miles, 1997; Odden & Busch, 1998). Resource re-allocation expands our tr aditional notions of how to bring resources to bear on the achievement of higher prod uctivity. It also shifts the questions one asks, from those concerning the effects of incr emental resource increases (a typical question in productivity research) to questions reg arding the effects of alternative configurations of the same resource. In other words rather than seeking a new program from a new funding source, resources are viewed as available for redesign in order to develop a more productive way of managing existing resources. One of the most prominent resources to be re-configured is the allo cation of time that teachers spend with students and with other educators. From a policy standpoint, resource re-alloc ation challenges the typical manner by which new policies or initiatives are introduced by policymakers for implementation by educators. The press felt by policymakers to seek o ut solutions to problems faced in education often results in a response which include s the establishment of new guidelines, regulations, and/or opportunities, and may or may not be accompanied by the infusion of additional fiscal resources. That is, m ost education policies are not designed to be fiscally neutral. However, resource re-alloca tion assumes that there are no new dollars available for distribution. Rather, resourc es are shifted from the support of one program configuration or policy initiative to some other configuration or purpose. This implies that investment priorities change, resultin g in the reduction or removal of goods or services that presumably were valued by some con stituency. This shift is likely to
13 of 21encounter at least some resistance by those individ uals or groups whose interests are perceived to be adversely affected by a particular re-allocation strategy. Consequently, policies which depend on resource re-allocation req uire a different approach than the traditional strategies of providing financial incen tives for adopting particular policies or threats of loss of funding for failure to meet spec ific requirements. There are multiple policy options that can influence teaching quality, each having implications for resource allocation or reallocatio n. Unless care is taken, however, investments in one policy may hinder the advancemen t of another, equally important aspect of teacher development. Let us consider the following example. One common and long-standing teacher compensation policy strategy has been focused on the goal of attracting and retaining higher quality teachers by raising salary levels. While human capital theory would indicate that this strategy ha s an evidentiary base, this policy might hinder the acceptance of other notions of compensat ion, such as skills-based pay. Another example taken from policies related to the provision of teacher professional development further illustrates the potential confl ict among policy strategies. Traditional teacher compensation policies provide financial inc entives for teachers who accrue additional continuing education credits. The acquis ition of these credits is mostly within the purview of the individual teacher, and the type amount, and quality of the offerings selected may or may not be an optimal match with th e types of knowledge and skills which might be most effective in supporting the tea cher's work with students. Additionally, the typical manner in which these con tinuing education credits are delivered often run counter to current notions of b est practice in professional development. To further complicate matters, profess ional development opportunities are also connected to special revenue sources,(Note 3) each with its own set of guidelines and reporting requirements. Consequently, policymak ers typically face a challenge when attempting to introduce new approaches to professio nal development as they will most likely face pressure to continue with existing form s of teacher compensation, add on new supports for the delivery of professional devel opment, and ensure that activities which are undertaken meet the requirements of the v arious funding sources. Faced with this complexity, a crazy quilt approach to resource allocation for professional development often results. This mixed bag of resour ce allocation strategies does not take advantage of the potential opportunity for resource re-allocation fashioned through a more strategic approach. In short, without a compre hensive approach to policies which are aimed at improving teacher quality, it is unlik ely that resources will be maximized. Much work is being done throughout the nati on to assist policymakers with the development of a comprehensive approach to addressi ng the improvement of teacher quality. The work of partner states who are collabo rating with the National Commission on Teaching and America's Future is one such exampl e of an effort to develop comprehensive policy strategies that support teache r quality. In order to maximize the effectiveness of this type of strategic approach, p olicymakers must also develop resource allocation policies which are responsive to and ref lective of a comprehensive approach to investments in teacher quality. In sum, economic perspectives can provide s ome useful insights in addressing the complex challenge of how resources can best be allo cated for the improvement of teacher quality. Many questions regarding the effec tiveness of resource allocation for this purpose remain. However, lessons learned from an economic perspective, particularly from human capital theory, indicate th at we should be cautious of policy approaches which are simply additive. Instead, incr eased attention should be devoted to policies which focus on more finely tuned notions o f teacher quality. Finally, initial work which investigates policies and practices whic h result in the re-configuration of
14 of 21existing resources ought to be significantly expand ed.NotesFor a contemporary review of the contributions made to the study of human capital theory, see Sweetland, S. (1996). Human cap ital theory: Foundations of a field of inquiry, Review of Educational Research 66(3), 341-359. 1. For a discussion of these cost implications, see Ri ce, J.K. (1999) "Recent trends in the theory and practice of teacher professional dev elopment: implications for cost," paper presented at the annual conference of the American Education Finance Association, March 18-20, 1999. 2. Examples of special revenue sources at the federal level which contain funding for professional development include Title 1, Part A (B asic and Concentrated Grants), Title II (the Eisenhower Professional Development P rogram), Title II (the Technology Literacy Challenge Fund), Title IV (Safe and Drug-Free Schools and Communities), Title VI (the Innovative Education Pr ogram Strategies fund), and Goals 2000:Educate America Act. Numerous special fu nding sources for professional development exist at state and local l evels as well. 3.ReferencesBarnett, W. S. (December 1994). Obstacles and oppor tunities: Some simple economics of school finance reform. Educational Policy 8 4: 436-452. Bellon, E.C., J. J. Bellon, M. A. Blank, D. J. G. B rian, and C. A. Kershaw (1989, March). Alternative incentive programs for school b ased reform. Paper presented at the annual meeting of the American Educational Research Association, San Francisco, CA. Benson, C.S. (1978). The economics of public education (3rd ed.) Boston: Houghton Mifflin.Biddle, B.J. (1997). Foolishness, dangerous nonsens e, and real corrrelates of state differences in achievement. Phi Delta Kappan (September), 9-13. Brown, B. W. & D. H. Saks (1975). The production an d distribution of cognitive skills in schools. Journal of Political Economy 83 3: 571-593. Carroll, J. (1963). A model for school learning. Teachers College Record 64 : 723-733. Cohen, D. K., M. McLaughlin, & J. Talbert (Eds.) (1 993). Teaching for understanding: Challenges for policy and practice. San Francisco: Jossey-Bass. Conley, S. & R. Levinson (1993). Teacher work redes ign and job satisfaction. Educational Administration Quarterly 29 4: 453-478. Corcoran, T.B. (1995). Helping teachers teach well: Transforming professio nal development. New Brunswick, NJ: Consortium for Policy Research in Education Policy Briefs.
15 of 21Darling-Hammond, L. (2000). Teacher quality and stu dent achievement: A review of state policy evidence. Education Policy Analysis Archive 8 No. 1. Available online at http://epaa.asu.edu/epaa/v8n1/.Darling-Hammond, L.(1994). The current status of te aching and teacher development in the United States. Background paper prepared for th e National Commission on Teaching and America's Future.Darling-Hammond, L. & B. Berry (1988). The evolution of teacher policy. Santa Monica, CA: RAND.Darling-Hammond, L., & M. W. McLaughlin (1995, Apri l). Policies that reform professional development in an era of reform. Phi Delta Kappan 76 8: 597-604. Darling-Hammond, L. & D. Ball (1997). Teaching to high standards: What policymakers should know and be able to do A report to the National Education Goals Panel (http://www.negp.gov/Reports/highst.htm).Education Commission of the States (1997). Investme nt in teacher professional development: A look at 16 districts. Denver, CO: Au thor. Ehrenberg, R.G. & D. J. Brewer (1995). Did teacher' s race and verbal ability matter in the 1960s? Coleman revisited. Economics of Education Review 14 : 291-299. Elmore, R. (1994). Thoughts on program equity: Prod uctivity and incentives for performance in education. Educational Policy 8 4: 453-459. Elmore, R. (1997). Investing in teacher learning: Staff development an d instructional improvement in Community School District #2, New Yo rk City Washington, DC: National Commission on Teaching and America's Futur e, Consortium for Policy Research in Education.Ferguson, R. F. & H.F. Ladd (1996). How and why mon ey matters: An analysis of Alabama schools. In Helen Ladd (ed) Holding Schools Accountable. (pp. 265-298) Brookings Institution: Washington, DC.Ferguson, R. F. (1991). Paying for public education : New evidence on how and why money matters. Harvard Journal on Legislation 28 2: 465-497. Firestone, W. (1991). Merit pay and job enlargement as reforms: Incentives, implementation, and teacher response. Educational Evaluation and Policy Analysis 13 3: 269-288.Freiberg, J. & S. Knight (1991). Career ladder prog rams as incentives for teachers. In S. C. Conley and B. S. Cooper (Eds.) The School as a Work Environment: Implications for Reform. Boston: Allyn and Bacon. Fullan, M. (1993) Change Forces: Probing the Depths of Educational Re form. London: Falmer Press.
16 of 21Hanushek, E.A. (1981) Throwing money at schools. Journal of Policy Analysis and Management 1 1: 19-41. Hanushek, E. A. (1991). When school finance "reform may not be good policy. Harvard Journal on Legislation 28 2: 423-456. Hanushek, E. A. (1989). The impact of differential expenditures on school performance. Educational Researcher 18 4: 45-65. Hanushek, E. A. (1986). The economics of schooling: Production and efficiency in public schools. Journal of Economic Literature 24 : 1141-1177. Hargreaves, A. (1990). Teachers' work and the polit ics of time and space. Qualitative Studies in Education 3 : 303-320. Hargreaves, A. (1993). Individualism and individual ity: Reinterpreting the teacher culture. In J. W. Little and M. W. McLaughlin (Eds. ), Teachers' work: Individuals, colleagues, and contexts New York: Teachers College Press. Hedges, L.V., R.D. Laine, & R.Greenwald (1994, Apri l). Does money matter? A meta-analysis of studies of the effects of differen tial school inputs on student outcomes. Educational Researcher 23 3: 5-14. Houston, R. W. & J. H. Freiberg (1979). Perpetual m otion, blindman's bluff, and inservice education. Journal of Teacher Education, 30 1: 7-9. Hughes, J., C. G. Moon, & W. S. Barnett (1993, Octo ber). Revenue-driven costs: The case of resource allocation in public primary and s econdary education. Paper presented at the annual meeting of the Atlantic Economic Soci ety, Philadelphia, PA. Johnson, S. M. (1990). Redesigning teachers' work. In R.F. Elmore & Associates, Restructuring schools: The next generation of educa tional reform. San Francisco: JosseyBass.Kelley, C. (1997). Teacher compensation and organiz ation. Educational Evaluation and Policy Analysis 19 1: 1528. Lankford, H. & Wyckoff, J. (1996). The allocation o f resource to special education and regular instruction. In H.F. Ladd (Ed.), Holding schools accountable (pp. 221-262) Washington, DC: Brookings Institution.Little, J.W., W.H. Gerritz, D.H. Stern, J.W. Guthri e, M.W. Kirst & D.D. Marsh (1987). Staff development in California. Policy Analysis for California Education (PACE) an d Far West Laboratory for Educational Research and De velopment, (Policy paper #PC87-12-15, CPEC), San Francisco, CA.Little, J.W. (1989). District policy choices and te acher's professional development opportunities. Educational Evaluation and Policy Analysis 11 2: 165-179.
17 of 21Little, J. W. (1993). Teachers' professional develo pment in a climate of educational reform. Educational Evaluation and Policy Analysis 15 2: 129-151. Lortie, D. C. (1975). Schoolteacher. Chicago: University of Chicago Press. Lytle, J. H. (1983). Investment options for inservi ce teacher training. Journal of Teacher Education 34 1: 28-31. Miles, K.H. (1997, June) Rethinking the use of teac her resources. School Business Affairs 63 6: 3540. Miles, K.H. & L. Darling-Hammond (1998) Rethinking the allocation of teaching resources: Some lessons from highperforming schoo ls. Educational Evaluation and Policy Analysis 20 1: 9-29. Miller, B., B. Lord, & J. Dorney (1994). Staff development for teachers: A study of configurations and costs in four districts. Education Development Center, Newtonville, MA.Mohrman A. M., S. A. Mohrman, & A. R. Odden (1996). Aligning teacher compensation with systemic school reform: Skillba sed and group-based performance rewards. Educational Evaluation and Policy Analysis 18 1: 51-71. Monk, D. H., (1990). Educational finance: An economic approach. New York: McGraw Hill.Monk, D.H. (1992). Education productivity research: an update and assessment of its role in education finance reform. Educational Evaluation and Policy Analysis 14 : 307-332. Monk, D.H. & J.K. Rice (in press). Modern education productivity research: Emerging implications for the financing of education. In Selected Papers in School Finance Washington, DC: National Center for Education Stati stics. Moore, D., & A. Hyde (1981). Making sense of staff development: An analysis of s taff development programs and their costs in three urban school districts Chicago: Designs for Change.Mortimer, P., P. Sammons, L.Stoll, D. Lewis, & R. E cob (1988). School matters Berkeley, CA: University of California Press.Murnane, R.J. (1991). Interpreting the evidence on "Does Money Matter." Harvard Journal on Legislation 28: 457-464. Murnane, R. J. (1975). The impact of school resources on the learning of i nner city children. Cambridge, MA: Ballinger. Murnane, R.J. & D. K. Cohen (1986). Merit pay and t he evaluation problem. Harvard Educational Review 56 1: 1-17.
18 of 21National Foundation for the Improvement of Educatio n (1996) Teachers take charge of their learning: Transforming professional developme nt for student success Washington, DC: Author.Nikansen, W. A. (1971). Bureaucracy and representative government. Chicago: Aldine Atherton.Odden, A. & C.Busch (1998). Financing schools for high performance: Strategies for improving the use of educational resources San Francisco, CA: Jossey-Bass. Odden, A. & C.Kelley (1997). Paying teachers for what they know and do: New and smarter compensation strategies to improve schools. Thousand Oaks, CA: Corwin Press.Odden, A. & W.Clune (1995). Improving educational p roductivity and school finance. Educational Researcher 24 9: 6-10, 22. Orlich, D. C. & A. Evans (1990). Regression analysis: A novel way to examine staff development cost factors. Unpublished manuscript. ERIC Reproduction Service Document No. ED 331 808.Protsik, J. (1996). History of teacher pay and ince ntive reforms. Journal of School Leadership 6 3: 265289. Resnick, L.(1993). Standards, assessment, and educa tional quality. Stanford Law and Policy Review 4 : 5359. Richardson, V. (1990). Significant and worthwhile c hange in teaching practice. Educational Researcher 19 7: 1018. Robinson, G. (1983). Paying teachers for performance and productivity: L earning from experience. Arlington, VA: Educational Research Service. Ross, R. (1994). Effective teacher development through salary incent ives (An exploratory analysis). RAND, Institute on Education and Training. Rossmiller, R.A. (1986). Resource allocation in schools and classrooms: Fina l report. Madison, WI: University of Wisconsin-Madison, Wisco nsin Center for Education Research, School of Education.Smith, A.(1776). An inquiry into the nature and causes of the wealth of nations. Smith, M.S. B.W. Scott, & J. Link (1995). The growi ng importance of cognitive skills in wage determination. Review of Economics and Statistics 77 : 251-266. Smylie, M.A. (1995) Teacher learning in the workpla ce: Implications for school reform. In T.R. Guskey & M. Huberman (Eds), Professional development in education (pp. 92113). New York: Teachers College Press.Southern Regional Education Board (1994). Reflecting on ten years of incentive
19 of 21 programs: The 1993 SREB Career Ladder Clearinghouse Survey. Atlanta, GA: Author. Stern, D. S., W.Gerritz, & J.W. Little (1989). Maki ng the most of the district's two (or five) cents: Accounting for investment in teachers' professional development. Journal of Education Finance 14 4: 19-26. Summers, A.& B.Wolfe (1977). Do schools make a diff erence? American Economic Review 67 4: 639-652. Thomas, J. A. & F. Kemmerer (1983). Money, time, and learning. Albany, NY State University of New York at Albany, School of Educati on. Witte, J.F. (1990, August). Understanding high scho ol achievement: After a decade of research, do we have any confident policy recommend ations? Paper presented at the annual meeting of the American Political Science As sociation, San Francisco.About the AuthorMargaret L. PleckiEducational Leadership and Policy StudiesUniversity of WashingtonBox 353600Seattle, WA 98195-3600 Email:email@example.com Margaret Plecki is an Assistant Professor at the Un iversity of Washington, Area of Educational Leadership and Policy Studies. Her rese arch and teaching focus on school finance, the economics of education, school improve ment, and education policy. She earned her Ph.D. from the University of California, Berkeley.Copyright 2000 by the Education Policy Analysis ArchivesThe World Wide Web address for the Education Policy Analysis Archives is epaa.asu.edu General questions about appropriateness of topics o r particular articles may be addressed to the Editor, Gene V Glass, firstname.lastname@example.org or reach him at College of Education, Arizona State University, Tempe, AZ 8 5287-0211. (602-965-9644). The Commentary Editor is Casey D. C obb: email@example.com .EPAA Editorial Board Michael W. Apple University of Wisconsin Greg Camilli Rutgers University John Covaleskie Northern Michigan University Alan Davis University of Colorado, Denver
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Educational policy analysis archives.
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Economic perspectives on investments in teacher quality : lessons learned from research on productivity and human resource development / Margaret L. Plecki.
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