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Rules Rather than Discretion: Teacher Hiring and Rent Extraction

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  • Estrada, Ricardo

Abstract

Because of data limitations, there is little empirical research on how firms conduct hiring and the merits of different recruitment strategies. In this paper, I take advantage of a unique setting that allows me to compare the quality (value-added to student achievement) of the teachers hired in a discretionary proce3ss led by the teachers' union in Mexico with those hired on the basis of a screening rule. My results show that the teachers' union selects applicants of a considerably lower quality than those selected using a standardized test, despite the fact that the test has no power to predict teacher quality. I find evidence that the results are not explained by the self-selection of high-quality teachers to follow the test-based process. The combination of these results indicates that the teachers selected through the discretionary process are from the bottom of the distribution of applicant quality. My analysis also reveals that joint committees of state officials and union representatives allocate teachers hired in this way to schools in more "desirable" localities, but with similar pre-treatment trends in outcomes. Findings are consistent with standard models of rent extraction.

Suggested Citation

  • Estrada, Ricardo, 2015. "Rules Rather than Discretion: Teacher Hiring and Rent Extraction," Economics Working Papers MWP2015/14, European University Institute.
  • Handle: RePEc:eui:euiwps:mwp2015/14
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    Cited by:

    1. Matteo Bobba & Tim Ederer & Gianmarco Leon-Ciliotta & Christopher A. Neilson & Marco Nieddu, 2021. "Teacher Compensation and Structural Inequality: Evidence from Centralized Teacher School Choice in Peru," Working Papers 648, Princeton University, Department of Economics, Industrial Relations Section..
    2. Lee Crawfurd & Todd Pugatch, 2020. "Teacher Labor Markets in Developing Countries," Working Papers 546, Center for Global Development.
    3. Felipe Barrera-Osorio & Paul Gertler & Nozomi Nakajima & Harry Patrinos, 2020. "Promoting Parental Involvement in Schools: Evidence From Two Randomized Experiments," NBER Working Papers 28040, National Bureau of Economic Research, Inc.
    4. Pablo Brassiolo & Ricardo Estrada Martinez & Gustavo Fajardo & Julian Martinez-Correa, 2021. "Family Rules: Nepotism in the Mexican Judiciary," Asociación Argentina de Economía Política: Working Papers 4443, Asociación Argentina de Economía Política.
    5. De Hoyos Navarro,Rafael E. & Estrada,Ricardo & Vargas Mancera,Maria Jose, 2021. "Do Large-Scale Student Assessments Really Capture Cognitive Skills ?," Policy Research Working Paper Series 9537, The World Bank.
    6. Diana Moreira & Santiago Pérez, 2022. "Who Benefits from Meritocracy?," NBER Working Papers 30113, National Bureau of Economic Research, Inc.
    7. Jonas Radbruch & Amelie Schiprowski, 2020. "Interview Sequences and the Formation of Subjective Assessments," ECONtribute Discussion Papers Series 045, University of Bonn and University of Cologne, Germany.
    8. de Hoyos, Rafael & Estrada, Ricardo & Vargas, María José, 2021. "What do test scores really capture? Evidence from a large-scale student assessment in Mexico," World Development, Elsevier, vol. 146(C).
    9. Brutti, Zelda & Sánchez Torres, Fabio, 2022. "Turning around teacher quality in Latin America: Renewed confidence and lessons from Colombia," Economic Analysis and Policy, Elsevier, vol. 73(C), pages 62-93.
    10. Brassiolo, Pablo & Estrada, Ricardo & Fajardo, Gustavo, 2020. "My (running) mate, the mayor: Political ties and access to public sector jobs in Ecuador," Journal of Public Economics, Elsevier, vol. 191(C).
    11. World Bank, 2018. "World Development Report 2018 [Rapport sur le développement dans le monde 2018]," World Bank Publications - Books, The World Bank Group, number 28340, December.
    12. Oana Borcan & James Merewood, 2022. "Positive Disruption? Meritocratic Principal Selection and Student Achievement," University of East Anglia School of Economics Working Paper Series 2022-11, School of Economics, University of East Anglia, Norwich, UK..
    13. Claudio Lucifora & Marco Tonello, 2020. "Monitoring and Sanctioning Cheating at School: What Works? Evidence from a National Evaluation Program," Journal of Human Capital, University of Chicago Press, vol. 14(4), pages 584-616.
    14. César O. Ramírez-García & Danny J. Lluguay-Quispillo & Jorge D. Inga-Lafebre & María F. Cuenca-Lozano & Rosa M. Ojeda-Zambrano & Carmen C. Cárdenas-Baque, 2023. "Musculoskeletal Disorders in Primary School Teachers," Sustainability, MDPI, vol. 15(23), pages 1-17, November.
    15. Christopher Neilson & Sebastian Gallegos & Franco Calle, 2019. "Screening and Recruiting Talent At Teacher Colleges Using Pre-College Academic Achievement," Working Papers 636, Princeton University, Department of Economics, Industrial Relations Section..
    16. Ricardo Estrada & María Lombardi, 2020. "Skills and Selection into Teaching: Evidence from Latin America," Department of Economics Working Papers wp_gob_2020_10, Universidad Torcuato Di Tella.
    17. Juan Saavedra & Dario Maldonado & Lucrecia Santibanez & Luis Omar Herrera Prada, 2017. "Premium or Penalty? Labor Market Returns to Novice Public Sector Teachers," NBER Working Papers 24012, National Bureau of Economic Research, Inc.

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    More about this item

    Keywords

    Hiring methods; Teachers' unions; School quality; Teacher hiring; Rent extraction;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions

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