Teachers, growth, and convergence

This paper examines the role of individual instruction and teacher quality in determining economic growth and convergence across school districts. The model shows that if teacher quality is more important for human capital ac cumulation than individual instruction, human capital convergence will occu r between two school districts. This convergence arises because a poor scho ol district hires relatively better teachers but uses them in larger classe s in comparison with a rich school district. The model is estimated on pane l data of the states of the United States from 1882 to 1990. The estimates indicate that teacher quality is relatively more important for human capita l accumulation than individual instruction. The model accounts for all the mean growth in state per capita incomes and between 80 and 100 percent of c onvergence in state per capita incomes.