This is a fascinating blog post which refers to a recent study on the value addition that teachers bring to the table. I quote the bit which is interesting.
They had access to data for a large urban school district that spanned the 20 years from 1988-89 through 2008-09. The data contained information on test scores for about 2.5 million children in grades 3 through 8, and also the schooling, and when available, earnings of the children after they finished these grades.
They find large effects on subsequent adult earnings when these young students had teachers who produced good improvements in test scores compared to the adult earnings of students who had teachers who produced little improvement in test scores. If teachers were paid in relation to their effects on the subsequent adult earnings of their students, these results imply that teachers with good VA ratings should be paid considerably more than teachers with bad ratings. Adopting such a payment system for teachers would produce an improvement in the quality of teaching because good teachers would be more willing to go into teaching at elementary and high school grades. Such a change may well induce an increase in overall spending on teachers’ salaries and benefits because taxpayers would be willing to support education more generously if they felt students were getting good and useful teaching.
As a teacher myself, as well as a parent and taxpayer, I am interested in the systems around teacher evaluation. I am happy that we are moving towards a more fair system of teacher evaluation rather than just dumping money into the education systems willy nilly.