What Are Discounted Earnings?
The other day I was reading research from way back in 2011: Chetty, Friedman and Rockoff’s fascinating and multifaceted study on the long-term financial impacts of teacher quality on students. The study draws some conclusions on the impact of teachers on lifetime earnings of their students, referencing the concept of present value. Read on:
At age 28, the oldest age at which we currently have a sufficiently large sample size to estimate earnings impacts, a 1 SD increase in teacher quality in a single grade raises annual earnings by 1.
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