and the attractiveness of labor market alternatives. These effects are discussed by building a logical argument based on an economic model of occupational choice. A discussion of the evidentiary base for the relationship between licensure tests and teacher competence follows the description of the model. The measurement and research design challenges that mark this field of research are discussed, and some empirical findings are reviewed.


This section is based on an economic model of supply and demand for teachers.1 The theory is used to both understand the potential consequences of licensure testing for the quality and quantity of beginning teachers and provide guidance as to the kind of information and empirical analysis needed to conduct a quantitative assessment of those consequences. The analysis assumes that beginning teachers have met whatever other licensing requirements exist (e.g., completion of an accredited teacher education program) prior to attempting to meet the testing requirement. The counterfactual, in which passing a test is not a requirement for licensure, assumes that in the absence of a licensure test the hiring practices of school districts would lead to a teacher work force with a higher proportion of “unqualified” teachers.2

As already noted, teacher licensure testing is intended to distinguish between those who are competent to enter the classroom in terms of the skills measured by the test and those who are not. Ideally, tests would do this, as in other professions, by limiting the supply of teachers only to those who are competent.

The supply side of the model assumes that individuals choose between teaching and other occupations according to which provides the larger expected (net) benefit, wages, and nonmonetary forms of compensation after education and other training costs are paid.3 As a baseline case, consider the situation where there is no test; in that case the model assumes that individuals who are potentially competent teachers are indistinguishable from those who are potentially incompetent. The net benefit to teaching in any given labor market is thus taken to be the same for all individuals independent of their potential competency.4 However, individuals are assumed to differ in the net benefits they receive in


A full presentation and discussion of the model are provided in Appendix E.


Ballou (1996) provides some evidence that school districts do not do a particularly good job of screening candidates under current accountability systems. However, it is not known whether the same would be true under a different accountability system (e.g., one based on student performance). It is beyond the scope of this report to consider alternatives to the current licensure system.


The net benefits may also include psychic rewards.


To simplify the analysis, the possibility that psychic benefits to teaching might differ according to potential competency is ignored.

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