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Salary Schedules, Teacher Sorting, and Teacher Quality

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  • Gregory Gilpin

    ()
    (Montana State University)

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    Abstract

    This study investigates how salary rigidities affect teacher quality across teaching subjects and high schools and whether high quality teachers can be compensated sufficiently to attract them into unfavorable schools. For identification, we rely on idiosyncratic variations in compensation across adjacent districts within the same state. The results indicate that, on average, math/science teachers’ scholastic aptitudes are 8.5 percentiles lower and humanities teachers are 4.5 percentiles lower compared to other teachers. Furthermore, we find that schools with higher percentages of student eligible for free lunch hire teachers with, on average, 7 to 17 percentiles lower scholastic aptitudes with the math/science teachers being even lower. Increases in lifetime compensation is found to raise the scholastic aptitude of teachers hired across all schools, with diminishing returns in schools with more favorable working conditions. However, the lower 26% of the teacher aptitude distribution seems to not respond to compensation at all with only marginal gains up to the 60th percentile. Furthermore, bonus/merit pay or additional school activity income do not seem to be significant in recruiting/retaining high aptitude teachers.

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    File URL: http://www.iub.edu/~caepr/RePEc/PDF/2011/CAEPR2011-004.pdf
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    Bibliographic Info

    Paper provided by Center for Applied Economics and Policy Research, Economics Department, Indiana University Bloomington in its series Caepr Working Papers with number 2011-004.

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    Length: 44 pages
    Date of creation: May 2011
    Date of revision:
    Handle: RePEc:inu:caeprp:2011-004

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    1. Bonesronning, Hans & Falch, Torberg & Strom, Bjarne, 2005. "Teacher sorting, teacher quality, and student composition," European Economic Review, Elsevier, vol. 49(2), pages 457-483, February.
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