Returns to Seniority among Public School Teachers
Returns to seniority account for a substantial share of public K-12 expenditures. Over the first ten to 15 years of a career, public school teachers enjoy average wage growth at least equivalent to that of other white-collar workers. Explanations for this structure in terms of human capital or costly monitoring lack theoretical and empirical support. A steeper wage-tenure profile reduces turnover, but it is doubtful that the costs of turnover are high enough to make this an optimal use of school resources. We conclude that the structure of teacher pay in public education is more consistent with rent-seeking than efficient contracting.