Randal Cremer_teacher playing on climbing wall with children

Improving teaching could boost the UK economy by almost £10 billion

Sept. 28, 2023

New research commissioned by Ambition Institute shows that great teaching is a key driver of economic growth.

Like many organisations working across the education sector, Ambition Institute believes that investing in teachers is the best way to tackle educational disadvantage and improve the life chances of the most vulnerable. Teachers dedicate their working lives to developing children with the knowledge, skills, and character they need to succeed in life, and play an integral role in supporting young people’s wellbeing.

But, with the pre-election debate focused squarely on the state of the UK economy, we want to shine a light on the important role that teachers play in enabling people from all backgrounds to get good jobs and attain financial security. For that reason, we commissioned the microeconomics consultancy Frontier Economics to explore the economic benefits of high quality teaching.

The economic analysis suggests that improving the quality of teaching by a meaningful but achievable amount would boost the future earnings of pupils by almost £10 billion.

Pupils benefitting from high quality teaching typically make two months’ additional progress per year. Over time, this adds up – leading to more young people securing good exam results and higher skilled, higher paid jobs.

Within a decade, if one in ten workers benefitted from this improvement in the quality of teaching, the total annual earnings of those in employment would increase by £2.6 billion. Within two decades, if the share of the workforce who experienced higher quality teaching grew to one in three individuals, this figure would rise to £9.7 billion.

Frontier Economics predict that children who experience improved teaching at school would continue to benefit throughout their working lives. The long-term impact would be an uplift of almost £160 billion in cumulative lifetime earnings.

A number of organisations are now calling for policymakers to act on the findings. Leaders from across the education and business sectors, as well as economists, have signed an open letter calling on policymakers to put investment in teachers as a core part of long-term plans to stimulate economic growth.

Frontier Economics also predicts that within ten years, high quality teaching would begin to yield additional tax revenue of £870 million annually – over three times what the government has currently pledged to spend on teacher professional development. The report’s authors state that action to support teachers to develop their professional expertise and skills and drive up the quality of teaching in this way would ‘generate significant returns to the taxpayer and be able to pay for itself within a short time frame’.

They conclude that expanding high quality training and development support for teachers would be the most sustainable and cost-effective way for policymakers to improve teaching standards and bring about the changes it describes.

Importantly, their analysis shows that this policy approach would benefit the least advantaged the most – not only in terms of academic attainment but also by promoting social mobility and reducing inequalities in areas including involvement in criminal activity and university attendance.

Signatories adding their name to the open letter calling for increased support for educators include Lord Jim O’Neill, founder of SHINE and Chair of Northern Powerhouse Partnership; Lindsey MacMillan, Professor of Economics and the Founding Director of the UCL Centre for Education Policy and Equalising Opportunities; Alison Peacock, CEO of the Chartered College of Teaching; and Leora Cruddas, Director of the Confederation of School Trusts.

Marie Hamer, Executive Director, Strategy and Impact at Ambition Institute, said: 

“Teachers play a vital role in developing the skills and knowledge of children who are tomorrow’s workforce. This research shows the clear benefits that would arise if governments invested in evidence-led professional development to support the incredible work that teachers do. As such, this must be a critical priority in politicians’ and policy makers’ plans to grow the UK’s economy.

“Teachers need access to high quality, evidence-based, rigorous development. Investing in providing this to all teachers will help ensure that every pupil, regardless of their background, gets the education they deserve. The impact of that will be a much-needed boost to our economy and greater opportunities for our young people, especially our least advantaged.”

Danail Popov, Associate Director at Frontier Economics said:

“The most important lesson of this study is that implementing policies to improve teachers’ effectiveness is likely to have substantial economic and social benefits, resulting in a significant return to the taxpayer.

Improved pupil performance is associated with higher earnings, increased productivity and higher GDP over the long term. Beyond labour market returns, reductions in inequalities in other non-pecuniary outcomes, such as crime rates and university attendance can also be expected.”

Read the research here.