Improve teaching to boost UK economy by almost £10bn

New research reveals great teaching could be the lever to unlock additional billions in earnings, as economists, businesses and education organisations call for increased support for educators.
 
New economic analysis suggests that improving the quality of teaching could boost earnings for those in employment by almost £10 billion annually, by the time a child born today enters the job market.  This would generate additional income tax receipts of over £3.2 billion each year.
 
The report by microeconomics consultancy Frontier Economics considered the benefit of enhancing teaching quality in the UK. The researchers found the long-term impact would be an uplift of almost £160 billion in cumulative lifetime earnings, as the positive effects would continue to be felt over the lifetime of the pupils who had benefitted from improved teaching at school.
 
Leaders from across the education and business sectors, as well as economists, have co-signed a letter to be published alongside the research, calling on policymakers to put investment in teachers at the core of plans to stimulate economic growth. Among the signatories are former Treasury Minister Lord Jim O’Neill; Professor of Economics and the Founding Director of the UCL Centre for Education Policy and Equalising Opportunities Lindsey MacMillan; Teach First CEO Russell Hobby; and Confederation of School Trusts Director Leora Cruddas.
 
Frontier Economics found that, within a decade of teaching standards being raised, with only one in ten workers having benefitted directly, the annual uplift in earnings for those in employment would be £2.6 billion. Within two decades, as the share of the workforce who experienced high quality teaching grows to one in three individuals, this figure would rise to £9.7 billion.
 
The findings show that improved teaching quality would generate an increasing benefit to the public purse. The report predicts that in ten years, it would yield additional tax revenue of £870m annually – over three times what the government has currently pledged to spend on teacher professional development. Within twenty years this would rise to 13 times (£3.2bn). Frontier Economics state that action to drive up the quality of teaching would ‘generate significant returns to the taxpayer and be able to pay for itself within a short time frame.’
 
The report concludes that expanding the training and development support available to teachers would be the most sustainable and cost-effective way for policymakers to improve teaching standards.
 
Drawing on existing research, the authors suggest that targeted policy interventions to upskill teachers are also likely to have positive implications for inequality and social mobility. This is because disadvantaged children are consistently more likely to be taught by less experienced or well qualified teachers.
 
Frontier Economics drew on studies conducted by economists at the Universities of Stanford and Harvard assessing how improved teaching standards – measured via improvements in test results – affect young peoples’ future earning potential. They sought to measure what the impact on the UK economy would be if the quality of teaching were improved by one standard deviation – equivalent to two months’ additional progress per year – across five of the thirteen years children spend in primary and secondary education.
 
Targeted investment in teachers’ professional skills can boost pupils’ progress by an additional two months a year, according to existing studies. The researchers made a conservative estimate of improvements that could be achieved through this type of investment.
 
The research was commissioned by national education charity Ambition Institute, which tackles educational disadvantage by helping teachers and school leaders become more expert.
 
Marie Hamer, Executive Director, Strategy and Impact at Ambition Institute, said: “Teachers play a vital role in developing the skills and knowledge of children who are tomorrow’s workforce. This research shows the clear benefits that would arise if governments invested in evidence-led professional development to support the incredible work that teachers do.  As such, this must be a critical priority in policy makers’ plans to grow the UK’s economy.
 
“Teachers need access to high quality, evidence-based, rigorous development. Investing in providing this to all teachers will help ensure that every pupil, regardless of their background, gets the education they deserve. The impact of that will be a much-needed boost to our economy and greater opportunities for our young people, especially our least advantaged.”
 
Danail Popov, Associate Director at Frontier Economics said:
“The most important lesson of this study is that implementing policies to improve teachers’ effectiveness is likely to have substantial economic and social benefits, resulting in a significant return to the taxpayer.
 
Improved pupil performance is associated with higher earnings, increased productivity and higher GDP over the long term. Beyond labour market returns, reductions in inequalities in other non-pecuniary outcomes, such as crime rates and university attendance can also be expected.”