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Local amenities, unobserved quality, and market clearing: Adjusting teacher compensation to provide equal education opportunities

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  • Tuck, Bradford
  • Berman, Matthew
  • Hill, Alexandra
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    Abstract

    Local school districts differ in their ability to pay for teacher quality, and in the amenities they offer as places to live and work. Market clearing with heterogeneous quality yields geographically varying teacher salary levels that confound scarcity with unobserved differences in quality. The paper discusses identification and estimation of a model of quality-adjusted teacher salaries in local markets with unobserved market-clearing prices. Exogenous variables in the model include community and district characteristics, job characteristics and working conditions, and individual characteristics. We apply the model to estimate the relative cost of providing comparably qualified teachers for urban and rural public schools in the state of Alaska, which has high geographic variation in amenities and local financial resources. The quality-adjusted geographic salary differentials implied by the results suggest much larger compensation differentials for isolated rural schools than most of these school districts can afford under current levels of state support.

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    Bibliographic Info

    Article provided by Elsevier in its journal Economics of Education Review.

    Volume (Year): 28 (2009)
    Issue (Month): 1 (February)
    Pages: 58-66

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    Handle: RePEc:eee:ecoedu:v:28:y:2009:i:1:p:58-66

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    Web page: http://www.elsevier.com/locate/econedurev

    Related research

    Keywords: Salary wage differentials School costs Teacher salaries;

    References

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    1. Gary Wagner & Tod Porter, 2000. "Location Effects and the Determination of Beginning Teacher Salaries: Evidence from Ohio," Education Economics, Taylor & Francis Journals, vol. 8(2), pages 109-127.
    2. Imazeki, Jennifer, 2005. "Teacher salaries and teacher attrition," Economics of Education Review, Elsevier, vol. 24(4), pages 431-449, August.
    3. Eric A. Hanushek & John F. Kain & Steven G. Rivkin & Daniel M. O'Brien, 2005. "The Market for Teacher Quality," Discussion Papers 04-025, Stanford Institute for Economic Policy Research.
    4. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    5. Susanna Loeb & Marianne E. Page, 2000. "Examining The Link Between Teacher Wages And Student Outcomes: The Importance Of Alternative Labor Market Opportunities And Non-Pecuniary Variation," The Review of Economics and Statistics, MIT Press, vol. 82(3), pages 393-408, August.
    6. Eric A. Hanushek, 2002. "The Failure of Input-based Schooling Policies," NBER Working Papers 9040, National Bureau of Economic Research, Inc.
    7. Antos, Joseph R. & Rosen, Sherwin, 1975. "Discrimination in the market for public school teachers," Journal of Econometrics, Elsevier, vol. 3(2), pages 123-150, May.
    8. Stoddard, Christiana, 2005. "Adjusting teacher salaries for the cost of living: the effect on salary comparisons and policy conclusions," Economics of Education Review, Elsevier, vol. 24(3), pages 323-339, June.
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    Cited by:
    1. David Philip Mcarthur & Inge Thorsen & Jan Ub√łe, 2010. "A Micro-Simulation Approach to Modelling Spatial Unemployment Disparities," Growth and Change, Gatton College of Business and Economics, University of Kentucky, vol. 41(3), pages 374-402.
    2. David McArthur & Inge Thorsen, 2011. "Determinants of internal migration in Norway," ERSA conference papers ersa10p532, European Regional Science Association.

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