WHY DONT SCHOOLS AND TEACHERS SEEM TO MATTER - ASSESSING THE IMPACT OF UNOBSERVABLES ON EDUCATIONAL PRODUCTIVITY

Using data drawn from the National Educational Longitudinal Study of 1 988, which allows students to be linked to particular teachers and cla sses, we estimate the impact of observable and unobservable schooling characteristics on student outcomes, A variety of models show some sch ooling resources (in particular, teacher qualifications) to be signifi cant in influencing tenth-grade mathematics test scores, Unobservable school, teacher, and class characteristics are important in explaining student achievement but do not appear to be correlated with observabl e variables in our sample. Thus, our results suggest that the omission of unobservables does not cause biased estimates in standard educatio nal production functions.