Estimating Principal Effectiveness

Much has been written about the importance of school leadership, but there is surprisingly little systematic evidence on this topic. This paper presents preliminary estimates of key elements of the market for school principals, employing rich panel data on principals from Texas State. The consideration of teacher movements across schools suggests that principals follow patterns quite similar to those of teachers – preferring schools that have less demands as indicated by higher income students, higher achieving students, and fewer minority students. Looking at the impact of principals on student achievement, there are some small but significant effects of the tenure of a principal in a school. Moreover, the variation in principal effectiveness tends to be largest in high poverty schools, consistent with hypothesis that principal ability is most important in schools serving the most disadvantaged students. Finally, principals who stay in a school tend to be more effective than those who move to other schools.