In 2004, the Chicago Public Schools and the Chicago Teachers Union signed a new collective bargaining agreement that gave principals the flexibility to dismiss probationary teachers (those with fewer than 5 years of experience) for any reason and without the hearing process typical in many urban...

We examine how well principals can distinguish between more and less effective teachers. To put principal evaluations in context, we compare them with the traditional determinants of teacher compensation—education and experience—as well as value-added measures of teacher effectiveness based...