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The impact of teachers’ wages on students’ performance in the presence of heterogeneity and endogeneity. Evidence from Brazil

  • Maresa, SPRIETSMA

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Department of Economics)

  • Fabio, WALTENBERG

In this paper we estimate the effect of teachers’ wages on students’ achievement in a developing country. We use test scores of pupils enrolled in the 8th grade of primary school, surveyed in 2001 in Brazil. We regress individual student test scores on gross monthly teacher wages allowing for nonlinearities. Given the strong heterogeneity of Brazilian pupils and teachers, we estimate quantile regressions (QR), which provide, instead of a constant mean coefficient, a detailed characterization of the effect of teachers’ wages on conditional pupils’s scores. For the same reason, we also run separate regressions for private and public schools. We then account for potential endogeneity of teachers’ wages through the estimation of instrumental variables models (IV). Finally, we estimate two-stage least absolute deviation models (2SLAD), that allow us to cope simultaneously with the heterogeneity of the student-teacher relationship and with the endogeneity of teachers’s wages. Our results show that wages of language teachers have a small, but positive and significant effect, on student test scores in private schools, controlling for endogeneity, but that they are insignificant, or even negative, in public schools. We also observe that teacher wages show a decreasing effect as we move along the conditional distribution of scores. The same effects are found for mathematics teachers, but the results are less robust and the coefficients are smaller.

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Paper provided by Université catholique de Louvain, Département des Sciences Economiques in its series Discussion Papers (ECON - Département des Sciences Economiques) with number 2005008.

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Length: 30
Date of creation: 01 Mar 2005
Date of revision:
Handle: RePEc:ctl:louvec:2005008
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  1. David Card & Alan Krueger, 1990. "Does School Quality Matter? Returns to Education and the Characteristics of Public Schools in the United States," NBER Working Papers 3358, National Bureau of Economic Research, Inc.
  2. Jesse Levin, 2001. "For whom the reductions count: A quantile regression analysis of class size and peer effects on scholastic achievement," Empirical Economics, Springer, vol. 26(1), pages 221-246.
  3. Southwick, Lawrence Jr & Gill, Indermit S., 1997. "Unified salary schedule and student SAT scores: Adverse effects of adverse selection in the market for secondary school teachers," Economics of Education Review, Elsevier, vol. 16(2), pages 143-153, April.
  4. Douglas Staiger & James H. Stock, 1994. "Instrumental Variables Regression with Weak Instruments," NBER Technical Working Papers 0151, National Bureau of Economic Research, Inc.
  5. Powell, James L, 1983. "The Asymptotic Normality of Two-Stage Least Absolute Deviations Estimators," Econometrica, Econometric Society, vol. 51(5), pages 1569-75, September.
  6. Joshua D. Angrist & Jonathan Guryan, 2003. "Does Teacher Testing Raise Teacher Quality? Evidence from State Certification Requirements," NBER Working Papers 9545, National Bureau of Economic Research, Inc.
  7. Amemiya, Takeshi, 1982. "Two Stage Least Absolute Deviations Estimators," Econometrica, Econometric Society, vol. 50(3), pages 689-711, May.
  8. Rosalind Levacic & Stephen Machin & David Reynolds & Anna Vignoles & James Walker, 2000. "The Relationship between Resource Allocation and Pupil Attainment: A Review," CEE Discussion Papers 0002, Centre for the Economics of Education, LSE.
  9. Caroline M. Hoxby & Andrew Leigh, 2004. "Pulled Away or Pushed Out? Explaining the Decline of Teacher Aptitude in the United States," American Economic Review, American Economic Association, vol. 94(2), pages 236-240, May.
  10. Stinebrickner, Todd R, 2001. "A Dynamic Model of Teacher Labor Supply," Journal of Labor Economics, University of Chicago Press, vol. 19(1), pages 196-230, January.
  11. Murnane, Richard J & Olsen, Randall J, 1989. "The Effects of Salaries and Opportunity Costs on Duration in Teaching: Evidence from Michigan," The Review of Economics and Statistics, MIT Press, vol. 71(2), pages 347-52, May.
  12. Ballou, Dale, 2001. "Pay for performance in public and private schools," Economics of Education Review, Elsevier, vol. 20(1), pages 51-61, February.
  13. Eric A. Hanushek & John F. Kain & Steven G. Rivkin, 1999. "Do Higher Salaries Buy Better Teachers?," NBER Working Papers 7082, National Bureau of Economic Research, Inc.
  14. Hanushek, Eric A, 1986. "The Economics of Schooling: Production and Efficiency in Public Schools," Journal of Economic Literature, American Economic Association, vol. 24(3), pages 1141-77, September.
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