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Labor Market Dynamics and Teacher Spatial Sorting

Author

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  • Tim Ederer

Abstract

This paper studies how career dynamics shape teacher spatial sorting using data on Peru's centralized teacher allocation. I develop a dynamic two-sided matching model and identify teacher and school preferences from observed assignments and schools' discretionary evaluations. I use the estimated model to correct teacher value-added estimates for two-sided endogenous selection. The analysis reveals the existence of a spatial job ladder that dynamically sorts more effective teachers into urban schools, contributing to spatial inequality in student achievement. Targeted mobility restrictions can reduce the urban-rural effectiveness gap by 76 percent, but avoiding adverse selection requires compensating teachers for the implied welfare loss, highlighting an inherent recruitment–retention trade-off.

Suggested Citation

  • Tim Ederer, 2026. "Labor Market Dynamics and Teacher Spatial Sorting," CESifo Working Paper Series 13063, CESifo.
    • Handle: RePEc:ces:ceswps:_13063
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    Keywords

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    JEL classification:

    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory

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