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The Labor Market for Teachers under Different Pay Schemes

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  • Barbara Biasi

Abstract

Compensation of most US public school teachers is rigid and solely based on seniority. This paper studies the effects of a reform that gave school districts in Wisconsin full autonomy to redesign teacher pay schemes. Following the reform some districts switched to flexible compensation. Using the expiration of preexisting collective bargaining agreements as a source of exogenous variation in the timing of changes in pay, I show that the introduction of flexible pay raised salaries of high-quality teachers, increased teacher quality (due to the arrival of high-quality teachers from other districts and increased effort), and improved student achievement.

Suggested Citation

  • Barbara Biasi, 2021. "The Labor Market for Teachers under Different Pay Schemes," American Economic Journal: Economic Policy, American Economic Association, vol. 13(3), pages 63-102, August.
    • Handle: RePEc:aea:aejpol:v:13:y:2021:i:3:p:63-102
    DOI: 10.1257/pol.20200295
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    References listed on IDEAS

    as
    1. Raj Chetty & John N. Friedman & Jonah E. Rockoff, 2014. "Measuring the Impacts of Teachers I: Evaluating Bias in Teacher Value-Added Estimates," American Economic Review, American Economic Association, vol. 104(9), pages 2593-2632, September.
    2. Thomas J. Kane & Douglas O. Staiger, 2008. "Estimating Teacher Impacts on Student Achievement: An Experimental Evaluation," NBER Working Papers 14607, National Bureau of Economic Research, Inc.
    3. Daniel Aaronson & Lisa Barrow & William Sander, 2007. "Teachers and Student Achievement in the Chicago Public High Schools," Journal of Labor Economics, University of Chicago Press, vol. 25(1), pages 95-135.
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    Citations

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    Cited by:

    1. Jo Blanden & Matthias Doepke & Jan Stuhler, 2022. "Education inequality," CEP Discussion Papers dp1849, Centre for Economic Performance, LSE.
    2. Nirav Mehta, 2022. "A Partial Identification Approach to Identifying the Determinants of Human Capital Accumulation: An Application to Teachers," University of Western Ontario, Departmental Research Report Series 20221, University of Western Ontario, Department of Economics.
    3. Jessalynn James & Matthew A. Kraft & John P. Papay, 2023. "Local supply, temporal dynamics, and unrealized potential in teacher hiring," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 42(4), pages 1010-1044, September.
    4. Eunice S. Han, 2023. "The effect of changes in public sector bargaining laws on teacher union membership," British Journal of Industrial Relations, London School of Economics, vol. 61(1), pages 133-158, March.
    5. Cook, Jason & Lavertu, Stéphane & Miller, Corbin, 2021. "Rent-Seeking through collective bargaining: Teachers unions and education production☆," Economics of Education Review, Elsevier, vol. 85(C).
    6. Julien Combe & Umut Mert Dur & Olivier Tercieux & Camille Terrier & M. Utku Ünver, 2022. "Market Design for Distributional Objectives in (Re)assignment: An Application to Improve the Distribution of Teachers in Schools," Boston College Working Papers in Economics 1050, Boston College Department of Economics.
    7. Bates, Michael & Dinerstein, Michael & Johnston, Andrew C. & Sorkin, Isaac, 2022. "Teacher Labor Market Equilibrium and Student Achievement," IZA Discussion Papers 15052, Institute of Labor Economics (IZA).
    8. Acton, Riley & Orr, Cody & Rogers, Salem, 2023. "Returns to School Spending in Rural America: Evidence from Wisconsin's Sparsity Aid Program," IZA Discussion Papers 15915, Institute of Labor Economics (IZA).
    9. Fullard, Joshua, 2023. "Labour market expectations and occupational choice: evidence from teaching," ISER Working Paper Series 2023-01, Institute for Social and Economic Research.
    10. Mariana Laverde & Elton Mykerezi & Aaron Sojourner & Aradhya Sood, 2023. "Gains from Reassignment: Evidence from A Two-Sided Teacher Market," Upjohn Working Papers 23-392, W.E. Upjohn Institute for Employment Research.
    11. Barigozzi, Francesca & Parasnis, Jaai & Tani, Massimiliano, 2022. "Gender, Motivation, and Self-Selection into Teaching," IZA Discussion Papers 15532, Institute of Labor Economics (IZA).
    12. Grönqvist, Erik & Hensvik, Lena & Thoresson, Anna, 2022. "Teacher career opportunities and school quality," Labour Economics, Elsevier, vol. 77(C).

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    More about this item

    JEL classification:

    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation

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