The study found that getting insurance coverage increased the use of health care, reduced financial strain and improved well-being — results that now provide invaluable guidance in understanding what we should expect from the Affordable Care Act.
Even when such experiments are unfeasible, there are ways to use “big data” to help answer policy questions. In a study that I conducted with two colleagues, we analyzed the impacts of high-quality elementary school teachers on their students’ outcomes as adults. You might think that it would be nearly impossible to isolate the causal effect of a third-grade teacher while accounting for all the other factors that affect a child’s life outcomes. Yet we were able to develop methods to identify the causal effect of teachers by comparing students in consecutive cohorts within a school. Suppose, for example, that an excellent teacher taught third grade in a given school in 1995 but then went on maternity leave in 1996. Since the teacher’s maternity leave is essentially a random event, by comparing the outcomes of students who happened to reach third grade in 1995 versus 1996, we are able to isolate the causal effect of teacher quality on students’ outcomes.
Using a data set with anonymous records on 2.5 million students, we found that high-quality teachers significantly improved their students’ performance on standardized tests and, more important, increased their earnings and college attendance rates, and reduced their risk of teenage pregnancy. These findings — which have since been replicated in other school districts — provide policy makers with guidance on how to measure and improve teacher quality."