Several of the Rocky Mountain states have a serious problem finding enough good K through 12 teachers. Many of those graduating from our colleges and universities leave the region. The most promising and highly qualified seem most likely to exit.

This sorry dispersion has huge, long term, and adverse consequences for our kids and our economy. Surely this is the result of rational, although unfortunate, decisions. What are their causes?

Here, economics can be helpful. For example, applying a few basic economic principles to the problem of recruiting and retaining good teachers can yield highly constructive results.

Before going on, here is my bias. I place a very high value on excellent teachers. I realize that some exceptional students could succeed no matter what, but I needed good teachers. I went to a small country school and had several and I remain forever grateful to them. The question is, how do we attract and retain them. Here's what economics suggests.

Those who have the character, intelligence, empathy, organization, discipline, and dedication to be good teachers, can also succeed elsewhere in the economy. The greatest scarcity in nearly any organization is people having these attributes. In an open economy, the selection process handsomely rewards these talents.

In addressing the problem, we should first recognize that teaching competes with other opportunities. The obvious conclusion is easy, pay teachers more. But the easy answer gets only a grade of C-. It's passing but let's do better.

Professor Dale Ballou of the University of Massachusetts has studied teacher pay and performance for over five years. He finds that teachers pay is usually based on a rigid formula of years in service and numbers of courses they've taken. His research indicates these factors are "massively unimportant" in determining how well their students do.

Smart, well intended and highly motivated teachers no doubt understand the perversity of such a system-and surely find it demoralizing. Under a uniform pay scale the excellent and the inferior receive the same salary.

The result produces adverse selection. Highly talented teachers have many other opportunities--and many take them. In contrast, dullard teachers are likely to remain in the classroom.

The Economist magazine notes that "the brightest individuals shun the teaching profession at every juncture." People who enter teaching with high grades in academic subjects such as math or history, and high test scores on SATs, are most likely to leave it.

A key insight from economics suggests reform. If we are to attract and retain excellent teachers for our children and communities, then we must recognize and pay the value of the opportunities they forgo by being teachers. It is ethically and intellectually irresponsible to deny this elemental principle.

Several implications follow. First, recognize that some people simply like to teach. (I do.) Exercising this preference carries its own non-financial reward. We'll be far ahead if we recognize these self motivated, often gifted teachers, and publicly reward their talents.

Second, one of the reasons we had so many good teachers it that teaching was one of the few professions open to women. Today nearly all professions are available. Unlike those of my generation, today smart and highly talented women have many opportunities. Admissions to law, medical, and MBA programs are nearly equally divided between women and men. Sexual discrimination no longer guarantees a cadre of smart women teachers. Today teaching competes with high status, well paid occupations.

Third, take advantage of our Rocky Mountain location. Many people rejoice in the luxury of summers free from the constraints of a 12 month job. Montana and our neighboring states are highly attractive to those who revel in the outdoor opportunities.

Fourth, admit that bureaucratic rigidities stultify and ultimately repulse many of our best teachers. Schools run by the government need not be ossified. Innovation and entrepreneurship are possible. Further, we can and should foster and monitor alternatives. This includes charter schools, vouchers, for-profit schools, schools run by religious institutions, and university lab schools. Good teachers, students, and communities will gain if we let competition loose.

The attrition of potentially good teachers is not a given. It is a problem that is amenable to reform. This reform isn't cheap. Teachers' pay must increase but pay alone isn't the answer. Institutional reform is equally important. Surely our kids are worth the investment.