We show that fade out biases value-added estimates at the teacher-level. To do so, we use administrative data from North Carolina and show that teachers' value-added depend on the quality of the teacher that preceded them. Value-added estimators that control for fade out feature no such teacher-level bias. Under a benchmark policy that releases teachers in the bottom five percent of the value-added distribution, fifteen percent of teachers released using traditional techniques are not released once fade out is accounted for. Our results highlight the importance of incorporating dynamic features of education production into the estimation of teacher quality.
Value-Added, Fade Out, Teacher Retention
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