The Tennessee Value-Added Assessment System measures teacher effectiveness on the basis of student gains, implicitly controlling for socioeconomic status and other background factors that influence initial levels of achievement. The absence of explicit controls for student background has been criticized on the grounds that these factors influence gains as well. In this research we modify the TVAAS by introducing commonly used controls for student SES and demographics. The introduction of controls at the student level has a negligible impact on estimated teacher effects in the TVAAS, though not in a simple fixed effects estimator with which the TVAAS is compared. The explanation lies in the TVAAS’s exploitation of the covariance of tests in different subjects and grades, whereby a student’s history of test performance substitutes for omitted background variables.

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