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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.

Suggested Citation

  • Hendricks, Matthew D., 2014. "Does it pay to pay teachers more? Evidence from Texas," Journal of Public Economics, Elsevier, vol. 109(C), pages 50-63.
  • Handle: RePEc:eee:pubeco:v:109:y:2014:i:c:p:50-63
    DOI: 10.1016/j.jpubeco.2013.11.001
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    References listed on IDEAS

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    1. 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).
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    Citations

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    Cited by:

    1. Figlio, D. & Karbownik, K. & Salvanes, K.G., 2016. "Education Research and Administrative Data," Handbook of the Economics of Education, Elsevier.
    2. repec:oup:publus:v:47:y:2017:i:4:p:673-706. is not listed on IDEAS
    3. Iwona Kowalska, 2016. "Sources Of Financing Knowledge-Based Economy: The Case Of Formal, Non-Formal And Informal Education In Poland," Oeconomia Copernicana, Institute of Economic Research, vol. 7(1), pages 75-90, March.
    4. Hendricks, Matthew D., 2015. "Towards an optimal teacher salary schedule: Designing base salary to attract and retain effective teachers," Economics of Education Review, Elsevier, vol. 47(C), pages 143-167.
    5. repec:bla:coecpo:v:35:y:2017:i:3:p:542-550 is not listed on IDEAS
    6. Steven, Bednar & Gicheva, Dora, 2016. "Workplace Support and Diversity in the Market for Public School Teachers," UNCG Economics Working Papers 16-5, University of North Carolina at Greensboro, Department of Economics.
    7. Sander Gerritsen & Sonny Kuijpers & Marc van der Steeg, 2015. "The effects of higher teacher pay on teacher retention," CPB Discussion Paper 316, CPB Netherlands Bureau for Economic Policy Analysis.
    8. Britton, Jack & Propper, Carol, 2016. "Teacher pay and school productivity: Exploiting wage regulation," Journal of Public Economics, Elsevier, vol. 133(C), pages 75-89.

    More about this item

    Keywords

    Teacher pay; Teacher turnover; Student achievement;

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

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