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The Effect of Employment Protection on Worker Effort: Evidence from Public Schooling

  • Brian A. Jacob
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    This paper studies the effect of employment protection on worker productivity and firm output in the context of a public school system. In 2004, the Chicago Public Schools (CPS) and Chicago Teachers Union (CTU) signed a new collective bargaining agreement that gave principals the flexibility to dismiss probationary teachers (defined as those with less than five years of experience) for any reason, and without the elaborate documentation and hearing process typical in many large, urban school districts. Results suggest that the policy reduced annual teacher absences by roughly 10 percent and reduced the prevalence of teachers with 15 or more annual absences by 20 percent. The effects were strongest among teachers in elementary schools and in low-achieving, predominantly African-American high schools, and among teachers with highpredicted absences. There is also evidence that the impact of the policy increased substantially after its first year.

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    File URL: http://www.nber.org/papers/w15655.pdf
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    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15655.

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    Date of creation: Feb 2010
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    Publication status: published as The Effect of Employment Protection on Teacher Effort Brian A. Jacob Journal of Labor Economics Vol. 31, No. 4 (October 2013), pp. 727-761
    Handle: RePEc:nbr:nberwo:15655
    Note: CH ED LS PE
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    1. Timothy Besley & Robin Burgess, 2004. "Can Labor Regulation Hinder Economic Performance? Evidence from India," The Quarterly Journal of Economics, Oxford University Press, vol. 119(1), pages 91-134.
    2. David H. Autor & William R. Kerr & Adriana D. Kugler, 2007. "Do Employment Protections Reduce Productivity? Evidence from U.S. States," NBER Working Papers 12860, National Bureau of Economic Research, Inc.
    3. Bauer, Thomas K. & Bender, Stefan & Bonin, Holger, 2004. "Dismissal Protection and Worker Flows in Small Establishments," IZA Discussion Papers 1105, Institute for the Study of Labor (IZA).
    4. David H. Autor & William R. Kerr & Adriana D. Kugler, 2007. "Does Employment Protection Reduce Productivity? Evidence From US States," Economic Journal, Royal Economic Society, vol. 117(521), pages 189-217, 06.
    5. Ronald G. Ehrenberg & Randy A. Ehrenberg & Daniel I. Rees & Eric L. Ehrenberg, 1989. "School District Leave Policies, Teacher Absenteeism, and Student Achievement," NBER Working Papers 2874, National Bureau of Economic Research, Inc.
    6. Bertola, Giuseppe, 1990. "Job security, employment and wages," European Economic Review, Elsevier, vol. 34(4), pages 851-879, June.
    7. Bradley, Steve & Green, Colin & Leeves, Gareth, 2007. "Worker absence and shirking: Evidence from matched teacher-school data," Labour Economics, Elsevier, vol. 14(3), pages 319-334, June.
    8. Charles T. Clotfelter & Helen F. Ladd & Jacob L. Vigdor, 2007. "Are Teacher Absences Worth Worrying About in the U.S.?," NBER Working Papers 13648, National Bureau of Economic Research, Inc.
    9. Robert C. Bird & John D. Knopf, 2009. "Do Wrongful-Discharge Laws Impair Firm Performance?," Journal of Law and Economics, University of Chicago Press, vol. 52(2), pages 197-222, 05.
    10. Fama, Eugene F, 1980. "Agency Problems and the Theory of the Firm," Journal of Political Economy, University of Chicago Press, vol. 88(2), pages 288-307, April.
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