Local amenities, unobserved quality, and market clearing: Adjusting teacher compensation to provide equal education opportunities
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.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- 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.
- Eric A. Hanushek, 2003.
"The Failure of Input-Based Schooling Policies,"
Royal Economic Society, vol. 113(485), pages 64-98, February.
- Eric A. Hanushek, 2002. "The Failure of Input-based Schooling Policies," NBER Working Papers 9040, National Bureau of Economic Research, Inc.
- 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..
- 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.
- 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.
- Eric A. Hanushek & John F. Kain & Daniel M. O'Brien & Steven G. Rivkin, 2005. "The Market for Teacher Quality," NBER Working Papers 11154, National Bureau of Economic Research, Inc.
- 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.
- 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.
- Imazeki, Jennifer, 2005. "Teacher salaries and teacher attrition," Economics of Education Review, Elsevier, vol. 24(4), pages 431-449, August. Full references (including those not matched with items on IDEAS)