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

Author

Listed:
  • Bobba, Matteo
  • Ederer, Tim
  • Leon-Ciliotta, Gianmarco
  • Neilson, Christopher
  • Nieddu, Marco

Abstract

This paper studies how increasing teacher compensation at hard-to-staff schools can reduce inequality in access to qualified teachers. Leveraging an unconditional change in the structure of teacher compensation in Peru, we first show causal evidence that increasing salaries at less desirable locations attracts teachers who score 0.45 standard deviations higher in standardized competency tests, leading to an average increase in student test scores of 0.33-0.38 standard deviations. We then estimate a model of teacher preferences over local amenities, school characteristics, and wages using geocoded job postings and rich application data from the nationwide centralized teacher assignment system. A policy that sets compensation at each job posting taking into account teacher preferences is more cost-effective than the actual policy in terms of reducing structural inequality in access to learning opportunities, and it possibly enhances the efficiency of the education system.

Suggested Citation

  • Bobba, Matteo & Ederer, Tim & Leon-Ciliotta, Gianmarco & Neilson, Christopher & Nieddu, Marco, 2022. "Teacher Compensation and Structural Inequality: Evidence from Centralized Teacher School Choice in Peru," CEPR Discussion Papers 16386, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:16386
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    Cited by:

    1. is not listed on IDEAS
    2. World Bank, 2023. "Making Teacher Policy Work," World Bank Publications - Reports 40579, The World Bank Group.
    3. 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.
    4. 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.
    5. Michael Bates & Michael Dinerstein & Andrew C. Johnston & Isaac Sorkin, 2022. "Teacher Labor Market Equilibrium and Student Achievement," CESifo Working Paper Series 9551, CESifo.
    6. 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.
    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. 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.
    9. 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.
    10. 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.
    11. 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 partic," China Economic Review, Elsevier, vol. 93(C).
    12. Gielen, Anne C. & Webbink, Dinand, 2023. "Unexpected Colonial Returns: Self-Selection and Economic Integration of Migrants over Multiple Generations," IZA Discussion Papers 16065, Institute of Labor Economics (IZA).

    More about this item

    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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