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Teacher Compensation and Structural Inequality: Evidence from Centralized Teacher School Choice in Perú

Author

Listed:
  • Marco Nieddu
  • Christopher A. Neilson
  • Tim Ederer
  • Matteo Bobba
  • Gianmarco León-Ciliotta

Abstract

We exploit data on centralized teacher recruitment in Per´u to establish that wage rigidity creates large urban-rural disparities in teacher effectiveness. Leveraging a teacher compensation reform, we provide causal evidence that increasing salaries in less desirable locations attracts qualified teachers and improves student learning. We estimate a model of teacher sorting and student achievement featuring rich heterogeneity in teachers' preferences and effectiveness. Substantial equity and efficiency gains arise from reallocating existing teachers to exploit match effects or attracting applicants with higher average effectiveness into public teaching. Cost-minimizing counterfactual wage schedules aimed at achieving these gains imply the latter is more cost-effective.

Suggested Citation

  • Marco Nieddu & Christopher A. Neilson & Tim Ederer & Matteo Bobba & Gianmarco León-Ciliotta, 2021. "Teacher Compensation and Structural Inequality: Evidence from Centralized Teacher School Choice in Perú," Working Papers 1273, Barcelona School of Economics.
    • Handle: RePEc:bge:wpaper:1273
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    Cited by:

    1. Hongmei Ma & Wanpeng Lei, 2025. "Compensating teachers serving rural schools: evidence from a developing region in southern China," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-15, December.
    2. World Bank, 2023. "Making Teacher Policy Work," World Bank Publications - Reports 40579, The World Bank Group.
    3. Mariana Laverde & Elton Mykerezi & Aaron Sojourner & Aradhya Sood, 2025. "Gains from Alternative Assignment? Evidence from a Two-Sided Teacher Market," Boston College Working Papers in Economics 1085, Boston College Department of Economics.
    4. Laverde, Mariana & Mykerezi, Elton & Sojourner, Aaron & Sood, Aradhya, 2026. "Match Effects and the Gains from Alternative Job Assignments: Evidence from a Teacher Labor Market," IZA Discussion Papers 18397, IZA Network @ LISER.
    5. Julien Combe & Umut Mert Dur & Olivier Tercieux & Camille Terrier & M. Utku Ünver, 2022. "Market Design for Distributional Objectives in (Re)assignment: An Application to Improve the Distribution of Teachers in Schools," Boston College Working Papers in Economics 1050, Boston College Department of Economics.
    6. Alfonso, Mariana & Busso, Matias & Ñopo, Hugo & Rivera, Antonella & Yentzen, Triana, 2025. "Becoming a teacher: Experimental evidence from an information intervention," International Journal of Educational Development, Elsevier, vol. 118(C).
    7. Mariana Laverde & Elton Mykerezi & Aaron Sojourner & Aradhya Sood, 2023. "Gains from Reassignment: Evidence from A Two-Sided Teacher Market," Upjohn Working Papers 23-392, W.E. Upjohn Institute for Employment Research.
    8. Robert J. LaLonde & Robert H. Topel, 1992. "The Assimilation of Immigrants in the U. S. Labor Market," NBER Chapters, in: Immigration and the Work Force: Economic Consequences for the United States and Source Areas, pages 67-92, National Bureau of Economic Research, Inc.
    9. Ye, Xiaoyang & Zhai, Muxin & Feng, Li, 2025. "Free teacher education in rural China: Incentives and challenges11We thank Jesse Bruhn, Olivia Chi, Heather Hill, Brian Jacob, Susanna Loeb, David Monk, Emily Rauscher, Eric Taylor, and seminar participants at AEFP, AERA, APPAM, Brown University, Pek," China Economic Review, Elsevier, vol. 93(C).
    10. Emma Duchini & Victor Lavy & Stephen Machin & Shqiponja Telhaj, 2025. "Personnel policy in public sector organizations: evidence from England's academy schools," CEP Discussion Papers dp2129, Centre for Economic Performance, LSE.
    11. Nirav Mehta, 2025. "A Partial Identification Approach to Identifying the Determinants of Human Capital Accumulation: An Application to Teachers," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 40(6), pages 639-654, September.
    12. Bates, Michael & Dinerstein, Michael & Johnston, Andrew C. & Sorkin, Isaac, 2022. "Teacher Labor Market Equilibrium and Student Achievement," IZA Discussion Papers 15052, IZA Network @ LISER.
    13. Gielen, Anne C. & Webbink, Dinand, 2023. "Unexpected Colonial Returns: Self-Selection and Economic Integration of Migrants over Multiple Generations," IZA Discussion Papers 16065, IZA Network @ LISER.

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    Keywords

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    JEL classification:

    • 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
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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