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The misallocation of pay and productivity in the public sector : evidence from the labor market for teachers

Author

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  • Bau,Natalie
  • Das,Jishnu

Abstract

This paper uses a unique dataset of both public and private sector primary school teachers and their students to present among the first estimates in a low-income country of (a) teacher effectiveness; (b) teacher value added (TVA) and its correlates; and (c) the link between TVA and teacher wages. Teachers are highly effective in our setting: Moving a student from the 5th to the 95th percentile in the public school TVA distribution would increase mean student test scores by 0.54 standard deviations. Although the first two years of experience, as well as content knowledge, are associated with TVA, all observed teacher characteristics explain no more than 5 percent of the variation in TVA. Finally, there is no correlation between TVA and wages in the public sector (although there is in the private sector), and a policy change that shifted public hiring from permanent to temporary contracts, reducing wages by 35 percent, had no adverse impact on TVA, either immediately or after 4 years. The study confirms the importance of teachers in low income countries, extends previous experimental results on teacher contracts to a large-scale policy change, and provides striking evidence of significant misallocation between pay and productivity in the public sector.

Suggested Citation

  • Bau,Natalie & Das,Jishnu, 2017. "The misallocation of pay and productivity in the public sector : evidence from the labor market for teachers," Policy Research Working Paper Series 8050, The World Bank.
    • Handle: RePEc:wbk:wbrwps:8050
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    Citations

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    Cited by:

    1. 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.
    2. David K. Evans & Fei Yuan & Deon Filmer, 2020. "Are Teachers in Africa Poorly Paid? Evidence from 15 Countries," Working Papers 538, Center for Global Development.
    3. Francisco Costa & Letícia Nunes & Fabio Miessi Sanches, 2024. "How to Attract Physicians to Underserved Areas? Policy Recommendations from a Structural Model," The Review of Economics and Statistics, MIT Press, vol. 106(1), pages 36-52, January.
    4. Goel, Deepti & Barooah, Bidisha, 2018. "Drivers of Student Performance: Evidence from Higher Secondary Public Schools in Delhi," GLO Discussion Paper Series 231, Global Labor Organization (GLO).
    5. Hugo Reis, 2020. "Girls' Schooling Choices And Home Production: Evidence From Pakistan," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 61(2), pages 783-819, May.
    6. Ansari, Ali H., 2020. "Comparing teaching practices, teacher content knowledge and pay in Punjab," International Journal of Educational Development, Elsevier, vol. 79(C).
    7. Dhushyanth Raju, 2017. "Public School Teacher Management in Sri Lanka," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 18(1), pages 39-63, March.
    8. Ansari, Ali H., 2020. "Cream skimming? Evaluating the access to Punjab’s public-private partnership programs in education," International Journal of Educational Development, Elsevier, vol. 72(C).
    9. Torsten Figueiredo Walter, 2020. "Misallocation in the Public Sector? Cross-Country Evidence from Two Million Primary Schools," STICERD - Economic Organisation and Public Policy Discussion Papers Series 70, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    10. 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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