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

Author

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

Abstract

We exploit data on centralized teacher recruitment in Perú 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

  • Matteo Bobba & Tim Ederer & Gianmarco Leon-Ciliotta & Christopher Neilson & Marco G. Nieddu, 2021. "Teacher Compensation and Structural Inequality: Evidence from Centralized Teacher School Choice in Perú," NBER Working Papers 29068, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:29068
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    Cited by:

    1. 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.
    2. Michael Bates & Michael Dinerstein & Andrew C. Johnston & Isaac Sorkin, 2022. "Teacher Labor Market Equilibrium and Student Achievement," CESifo Working Paper Series 9551, CESifo.
    3. 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.
    4. 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.
    5. World Bank, 2023. "Making Teacher Policy Work," World Bank Publications - Reports 40579, The World Bank Group.
    6. 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.
    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. 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).
    11. 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

    JEL classification:

    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • I20 - Health, Education, and Welfare - - Education - - - General
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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