An Economic Evaluation of Teacher Licensure Programs in North Carolina

In tight fiscal times, the North Carolina General Assembly and the Department of Public Instruction (DPI) would like to increase the efficiency of their expenditures. With the increased availability of teacher-level education data and more stringent evaluations of both teachers and teacher preparation programs, legislatures want to know if the benefit derived from licensing a teacher who attends a certain program is worth the economic investment. The purpose of this paper is to add to DPI’s analytical framework and help increase the efficiency of their expenditures by developing an initial cost-benefit evaluation of three different teacher licensure programs in North Carolina. This analysis is an incremental analysis of the teachers entering the program and not a private analysis of individual teacher choices. The programs included in this analysis are Western Carolina, UNC Charlotte, and NC Teach at NC State. For this analysis, I obtained both the direct and indirect costs per teacher of each licensure program. I then estimated the added benefits per teacher from each program using program selectivity ratings, SAT scores, and societal cost estimates of student lifetime earnings and teenage birth rates resulting from changes in student achievement. Finally, I discounted all costs and benefits to obtain an estimated net present value for each program. I found that the alternative licensure program, NC Teach, cost less per teacher than the two undergraduate programs. Because the UNC Charlotte and Western Carolina programs were correlated with larger student achievement gains though, these two programs generate greater net present values than NC Teach. When measured relative to the other two programs, the net present value of the NC Teach program is effectively zero. The percentage of NC Teach teachers who are employed is strong evidence though that the program generates marginal benefit to the state. To account for the difficulty in measuring both the costs and benefits, I performed sensitivity analysis assuming that all licensure programs produce the same quality teacher, assuming the program costs were ten percent less and greater than the costs reported, and assuming a lower discount rate. The sensitivity analysis on student achievement was the only calculation to affect the net present value ranking. The NC Teach program would be preferred to Western Carolina and UNC Charlotte if we assumed all licensure programs produced the same quality teacher. This change is a result of the fact that the NC Teach program costs less than the other two programs and is correlated with a positive increase in teacher wages compared to the average North Carolina teacher salary. Because of the student achievement sensitivity analysis findings and the impact this analysis had on the net present value calculations, DPI needs to conduct further research to distinguish the actual value-added estimates for each teacher in the program. I used value-added estimates from other scholars’ research, but DPI should build on this analytical framework and calculate more accurate value-added estimates and benefit calculations for each teacher-training program. When conducting research on teacher licensure programs, one will always need to address the fact that it is difficult to differentiate between the actual value-added of the program and the characteristics of the teachers before entering the program. DPI should therefore also partner with a researcher to examine the value-added of individual components of the teacher licensure programs. This research would be similar to the Boyd, Grossman, Lankford, Loeb, and Wyckoff study (2009) I used in this analysis.