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Does it pay to pay teachers more? Evidence from Texas

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  • Hendricks, Matthew D.

Abstract

This study presents robust evidence on the relationship between teacher pay and turnover using detailed panel data from Texas. While controlling for changes in district and local labor market characteristics, I estimate an overall turnover elasticity of −1.4 and show that the effect is largest for inexperienced teachers, declines with experience, and disappears around 19years of experience. Combining these results with what we know about the relationship between teacher value-added and experience, I show that paying teachers more improves student achievement through higher retention rates. The results also suggest that adopting a flat salary schedule may be a cheap way to improve student performance. I find no evidence that pay effects vary by the teacher's gender or subject taught.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Public Economics.

Volume (Year): 109 (2014)
Issue (Month): C ()
Pages: 50-63

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Handle: RePEc:eee:pubeco:v:109:y:2014:i:c:p:50-63

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Web page: http://www.elsevier.com/locate/inca/505578

Related research

Keywords: Teacher pay; Teacher turnover; Student achievement;

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References

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  1. Akerlof, George A, 1982. "Labor Contracts as Partial Gift Exchange," The Quarterly Journal of Economics, MIT Press, vol. 97(4), pages 543-69, November.
  2. Richard J. Murnane & Randall J. Olsen, 1990. "The Effects of Salaries and Opportunity Costs on Length of Stay in Teaching: Evidence from North Carolina," Journal of Human Resources, University of Wisconsin Press, vol. 25(1), pages 106-124.
  3. Charles T. Clotfelter & Helen F. Ladd & Jacob L. Vigdor, 2011. "Teacher Mobility, School Segregation, and Pay-Based Policies to Level the Playing Field," Education Finance and Policy, MIT Press, vol. 6(3), pages 399-438, July.
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  7. Rickman, Bill D. & Parker, Carl D., 1990. "Alternative wages and teacher mobility: A human capital approach," Economics of Education Review, Elsevier, vol. 9(1), pages 73-79, March.
  8. Harris, Douglas N. & Sass, Tim R., 2011. "Teacher training, teacher quality and student achievement," Journal of Public Economics, Elsevier, vol. 95(7), pages 798-812.
  9. Charles Clotfelter & Elizabeth Glennie & Helen Ladd & Jacob Vigdor, 2006. "Would Higher Salaries Keep Teachers in High-Poverty Schools? Evidence from a Policy Intervention in North Carolina," NBER Working Papers 12285, National Bureau of Economic Research, Inc.
  10. Robert M. Costrell & Michael Podgursky, 2009. "Peaks, Cliffs, and Valleys: The Peculiar Incentives in Teacher Retirement Systems and Their Consequences for School Staffing," Education Finance and Policy, MIT Press, vol. 4(2), pages 175-211, April.
  11. Zvi Griliches & Jerry A. Hausman, 1984. "Errors in Variables in Panel Data," NBER Technical Working Papers 0037, National Bureau of Economic Research, Inc.
  12. Eric A. Hanushek & EJohn F. Kain & Steven G. Rivkin, 2004. "Why Public Schools Lose Teachers," Journal of Human Resources, University of Wisconsin Press, vol. 39(2).
  13. Robert M. Costrell & Michael Podgursky, 2010. "Distribution of Benefits in Teacher Retirement Systems and Their Implications for Mobility," Education Finance and Policy, MIT Press, vol. 5(4), pages 519-557, October.
  14. Imazeki, Jennifer, 2005. "Teacher salaries and teacher attrition," Economics of Education Review, Elsevier, vol. 24(4), pages 431-449, August.
  15. Podgursky, Michael & Monroe, Ryan & Watson, Donald, 2004. "The academic quality of public school teachers: an analysis of entry and exit behavior," Economics of Education Review, Elsevier, vol. 23(5), pages 507-518, October.
  16. Peter Dolton & Wilbert van der Klaauw, 1999. "The Turnover of Teachers: A Competing Risks Explanation," The Review of Economics and Statistics, MIT Press, vol. 81(3), pages 543-550, August.
  17. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June.
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