Parents' responses to teacher qualifications

We identify the causal effect of children being assigned to more highly qualified teachers on their parents’ investments. Exploiting a unique setting in which teachers are randomly assigned to classes, we show that parents respond to more qualified teachers by increasing their children’s private tutoring. A potential mechanism is an increase in parents’ belief that achievement is driven by student effort—for which tutoring is instrumental. Teacher qualifications are unrelated to test scores, however. Instead, they weaken students’ beliefs that effort is important for achievement, suggesting that private tutoring may have a demotivating effect on students. We conclude that family-wide behavioral reactions are important in educational production.