Test Scores, Schools, and the Geography of Economic Opportunity

Do standardized test scores in a community indicate whether schools there are effective at producing human capital? Counties with high average test scores produce high-earning adults. But, using data from North Carolina, we find that counties' effects on test scores are either uncorrelated (for low-income kids) or negatively correlated (for high-income kids) with their effects on income in adulthood. We argue with a simple model that this is probably because the inputs directly responsible for counties' effects on test scores do not substantially increase income. In particular, we directly demonstrate that differences in test score production have little to do with teacher quality. Our results suggest that differences in test score production across places are not necessarily a useful measure of the quality of schools.