Cost-Effective Hiring in U.S. High Schools: Estimating Optimal Teacher Quantity and Quality Decisions

Extensive literature has shown that student attainment outcomes are affected by schools’ decisions to alter student-to-teacher ratios and overall teacher aptitude levels. However, these findings provide little information to policymakers and school administrators for understanding which teacher input decision provides the greatest student attainment return relative to the associated costs. This study estimates cost-effective teacher input strategies for U.S. high schools seeking to either increase graduation rates or four-year college attendance rates by graduating students. Empirical results indicate that reducing student-to-teacher ratios is the most cost-effective teacher input decision for high schools seeking to improve graduation rates. However, for schools whose objective is to increase four-year college attendance rates, it is more cost-effective to allocate funds to improving teacher quality levels. These results put into question policies such as class size reduction mandates, which disregard schools’ student attainment objectives and institute generalized teacher hiring constraints.