	Introduction

Two of the major goals of the Elementary and Secondary Education Act (ESEA), as amended by the No Child Left Behind Act of 2001 ( P.L. 107-110 ; NCLB), are to improve the quality of K-12 teaching and raise the academic achievement of students who fail to meet grade-level proficiency standards. In setting these goals, Congress recognized that reaching the second goal depends greatly on meeting the first; that is, quality teaching is critical to student success. Thus, NCLB established new standards for teacher qualifications and required that all courses in "core academic subjects" be taught by a highly qualified teacher by the end of the 2005-2006 school year. During implementation, the NCLB highly qualified teacher requirement came to be seen as setting minimum qualifications for entry into the profession and was criticized by some for establishing standards so low that nearly every teacher met the requirement. Meanwhile, policy makers have grown increasingly interested in the output of teachers' work; that is, their performance in the classroom and the effectiveness of their instruction. Attempts to improve teacher performance led to federal and state efforts to incentivize improved performance through alternative compensation systems. For example, through P.L. 109-149 , Congress authorized the Federal Teacher Incentive Fund (TIF) program, which provides grants to support teacher performance pay efforts. In addition, there are various programs at all levels (national, state, and local) aimed at reforming teacher compensation systems. The most recent congressional action in this area came with the passage of the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5 ) and, in particular, enactment of the Race to the Top (RTTT) program. In the area of teacher effectiveness, the final rule proposed a definition of an effective teacher as one "whose students achieve acceptable rates (e.g., at least one grade level in an academic year) of student growth (as defined in this notice)." That is, to be considered effective, teachers must raise their students' learning to a level at or above what is expected within a typical school year. States, LEAs, and schools must also include additional measures to evaluate teachers; however, these evaluations must be based, "in significant part, [on] student growth." This report addresses issues associated with the evaluation of teacher effectiveness based on student growth in achievement. It focuses specifically on a method of evaluation referred to as value-added modeling (VAM). Although there are other methods for assessing teacher effectiveness, in the last decade, VAM has garnered increasing attention in education research and policy due to its promise as a more objective method of evaluation. The first section of this report describes what constitutes a VAM approach and how it estimates the so-called "teacher effect." The second section identifies the components necessary to conduct VAM in education settings. Third, the report discusses current applications of VAM at the state and school district levels and what the research on these applications says about this method of evaluation. The fourth section of the report explains some of the implications these applications have for large-scale implementation of VAM. Finally, the report describes some of the federal policy options that might arise as Congress considers legislative action around these issues.
Two of the major goals of the Elementary and Secondary Education Act (ESEA), as amended by the No Child Left Behind Act of 2001 (P.L. 107-110; NCLB), are to improve the quality of K-12 teaching and raise the academic achievement of students who fail to meet grade-level proficiency standards. In setting these goals, Congress recognized that reaching the second goal depends greatly on meeting the first; that is, quality teaching is critical to student success. Thus, NCLB established new standards for teacher qualifications and required that all courses in "core academic subjects" be taught by a highly qualified teacher by the end of the 2005-2006 school year.
During implementation, the NCLB highly qualified teacher requirement came to be seen as setting minimum qualifications for entry into the profession and was criticized by some for establishing standards so low that nearly every teacher met the requirement. Meanwhile, policy makers have grown increasingly interested in the output of teachers' work; that is, their performance in the classroom and the effectiveness of their instruction. Attempts to improve teacher performance led to federal and state efforts to incentivize improved performance through alternative compensation systems. For example, through P.L. 109-149, Congress authorized the Federal Teacher Incentive Fund (TIF) program, which provides grants to support teacher performance pay efforts. In addition, there are various programs at all levels (national, state, and local) aimed at reforming teacher compensation systems. The most recent congressional action in this area came with the passage of the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5) and, in particular, enactment of the Race to the Top (RTTT) program.
In November 2009, the U.S. Department of Education released a final rule of priorities, requirements, definitions, and selection criteria for the RTTT. The final rule established a definition of an effective teacher as one "whose students achieve acceptable rates (e.g., at least one grade level in an academic year) of student growth (as defined in this notice)." That is, to be considered effective, teachers must raise their students' learning to a level at or above what is expected within a typical school year. States, LEAs, and schools must include additional measures to evaluate teachers; however, these evaluations must be based, "in significant part, [on] student growth."
This report addresses issues associated with the evaluation of teacher effectiveness based on student growth in achievement. It focuses specifically on a method of evaluation referred to as value-added modeling (VAM). Although there are other methods for assessing teacher effectiveness, in the last decade, VAM has garnered increasing attention in education research and policy due to its promise as a more objective method of evaluation. The first section of this report describes what constitutes a VAM approach and how it estimates the so-called "teacher effect." The second section identifies the components necessary to conduct VAM in education settings. Third, the report discusses current applications of VAM at the state and school district levels and what the research on these applications says about this method of evaluation. The fourth section of the report explains some of the implications these applications have for large-scale implementation of VAM. Finally, the report describes some of the federal policy options that might arise as Congress considers legislative action around these or related issues.