IDEAS home Printed from
   My bibliography  Save this paper

Analyzing the Determinants of the Matching Public School Teachers to Jobs: Estimating Compensating Differentials in Imperfect Labor Markets


  • Donald Boyd
  • Hamilton Lankford
  • Susanna Loeb
  • James Wyckoff


Although there is growing recognition of the contribution of teachers to students' educational outcomes, there are large gaps in our understanding of how teacher labor markets function. Most research on teacher labor markets use models developed for the private sector. However, markets for public school teachers differ in fundamental ways from those in the private sector. Collective bargaining and public decision making processes set teacher salaries. Thus it is unlikely that wages adjust quickly to equilibrate the supply and demand for worker and job attributes. The objective of this paper is to develop and estimate a model that more accurately characterizes the institutional features of teacher labor markets. The approach is based on a game-theoretic two-sided matching model and the estimation strategy employs the method of simulated moments. With this combination, we are able to estimate how factors affect the choices of individual teachers and hiring authorities, as well as how these choices interact to determine the equilibrium allocation of teachers across jobs. Even though this paper focuses on worker-job match within teacher labor markets, many of the issues raised and the empirical framework employed are relevant in other settings where wages are set administratively or, more generally, do not clear the pertinent markets for job and worker attributes.

Suggested Citation

  • Donald Boyd & Hamilton Lankford & Susanna Loeb & James Wyckoff, 2003. "Analyzing the Determinants of the Matching Public School Teachers to Jobs: Estimating Compensating Differentials in Imperfect Labor Markets," NBER Working Papers 9878, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:9878
    Note: ED LS

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Hanushek, Eric A. & Pace, Richard R., 1995. "Who chooses to teach (and why)?," Economics of Education Review, Elsevier, vol. 14(2), pages 101-117, June.
    2. Rickman, Bill D. & Parker, Carl D., 1990. "Alternative wages and teacher mobility: A human capital approach," Economics of Education Review, Elsevier, vol. 9(1), pages 73-79, March.
    3. Stinebrickner, Todd R., 1998. "An Empirical Investigation of Teacher Attrition," Economics of Education Review, Elsevier, vol. 17(2), pages 127-136, April.
    4. Kevin Lang & Sumon Majumdar, 2004. "The Pricing Of Job Characteristics When Markets Do Not Clear: Theory And Policy Implications," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 45(4), pages 1111-1128, November.
    5. Lucas, Robert E B, 1977. "Hedonic Wage Equations and Psychic Wages in the Returns to Schooling," American Economic Review, American Economic Association, vol. 67(4), pages 549-558, September.
    6. Berry, Steven T, 1992. "Estimation of a Model of Entry in the Airline Industry," Econometrica, Econometric Society, vol. 60(4), pages 889-917, July.
    7. Sattinger, Michael, 1979. "Differential Rents and the Distribution of Earnings," Oxford Economic Papers, Oxford University Press, vol. 31(1), pages 60-71, March.
    8. Dolton, Peter J, 1990. "The Economics of UK Teacher Supply: The Graduate's Decision," Economic Journal, Royal Economic Society, vol. 100(400), pages 91-104, Supplemen.
    9. Theobald, Neil D., 1990. "An examination of the influence of personal, professional, and school district characteristics on public school teacher retention," Economics of Education Review, Elsevier, vol. 9(3), pages 241-250, September.
    10. Burdett, Kenneth & Coles, Melvyn G, 1999. "Long-Term Partnership Formation: Marriage and Employment," Economic Journal, Royal Economic Society, vol. 109(456), pages 307-334, June.
    11. Dolton, P. J. & Makepeace, G. H., 1993. "Female labour force participation and the choice of occupation: The supply of teachers," European Economic Review, Elsevier, vol. 37(7), pages 1393-1411, October.
    12. Roth, Alvin E. & Sotomayor, Marilda, 1992. "Two-sided matching," Handbook of Game Theory with Economic Applications,in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 16, pages 485-541 Elsevier.
    13. Brewer, Dominic J, 1996. "Career Paths and Quit Decisions: Evidence from Teaching," Journal of Labor Economics, University of Chicago Press, vol. 14(2), pages 313-339, April.
    14. Todd R. Stinebrickner, 1999. "Estimation Of A Duration Model In The Presence Of Missing Data," The Review of Economics and Statistics, MIT Press, vol. 81(3), pages 529-542, August.
    15. Dale Ballou & Michael Podgursky, 1996. "Teacher Pay and Teacher Quality," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number tptq, November.
    16. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    17. Hwang, Hae-shin & Mortensen, Dale T & Reed, W Robert, 1998. "Hedonic Wages and Labor Market Search," Journal of Labor Economics, University of Chicago Press, vol. 16(4), pages 815-847, October.
    18. 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.
    19. Antos, Joseph R. & Rosen, Sherwin, 1975. "Discrimination in the market for public school teachers," Journal of Econometrics, Elsevier, vol. 3(2), pages 123-150, May.
    20. Todd R. Stinebrickner, 2002. "An Analysis of Occupational Change and Departure from the Labor Force: Evidence of the Reasons that Teachers Leave," Journal of Human Resources, University of Wisconsin Press, vol. 37(1), pages 192-216.
    21. Mont, Daniel & Rees, Daniel I, 1996. "The Influence of Classroom Characteristics on High School Teacher Turnover," Economic Inquiry, Western Economic Association International, vol. 34(1), pages 152-167, January.
    22. Charles Brown, 1980. "Equalizing Differences in the Labor Market," The Quarterly Journal of Economics, Oxford University Press, vol. 94(1), pages 113-134.
    23. Dale Ballou, 1996. "Do Public Schools Hire the Best Applicants?," The Quarterly Journal of Economics, Oxford University Press, vol. 111(1), pages 97-133.
    24. Baugh, William H. & Stone, Joe A., 1982. "Mobility and wage equilibration in the educator labor market," Economics of Education Review, Elsevier, vol. 2(3), pages 253-274, June.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Jeremy T. Fox, 2010. "Identification in matching games," Quantitative Economics, Econometric Society, vol. 1(2), pages 203-254, November.
    2. Jeremy T. Fox & David H. Hsu & Chenyu Yang, 2012. "Unobserved Heterogeneity in Matching Games with an Application to Venture Capital," NBER Working Papers 18168, National Bureau of Economic Research, Inc.
    3. Han, Seungjin & Yamaguchi, Shintaro, 2015. "Compensating wage differentials in stable job matching equilibrium," Journal of Economic Behavior & Organization, Elsevier, vol. 114(C), pages 36-45.
    4. Don Boyd & Hamp Lankford & Susanna Loeb & Matthew Ronfeldt & Jim Wyckoff, 2011. "The role of teacher quality in retention and hiring: Using applications to transfer to uncover preferences of teachers and schools," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 30(1), pages 88-110, December.
    5. Li, Fei & Ueda, Masako, 2005. "CEO-Firm Match and Principal-Agent Problem," CEPR Discussion Papers 5119, C.E.P.R. Discussion Papers.
    6. Scafidi Benjamin & Sjoquist David L. & Stinebrickner Todd R., 2006. "Do Teachers Really Leave for Higher Paying Jobs in Alternative Occupations?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 6(1), pages 1-44, December.
    7. Donald Boyd & Pam Grossman & Hamilton Lankford & Susanna Loeb & James Wyckoff, 2008. "Who Leaves? Teacher Attrition and Student Achievement," NBER Working Papers 14022, National Bureau of Economic Research, Inc.
    8. Player, Daniel, 2009. "Monetary returns to academic ability in the public teacher labor market," Economics of Education Review, Elsevier, vol. 28(2), pages 277-285, April.
    9. Jeremy T. Fox, 2008. "Estimating Matching Games with Transfers," NBER Working Papers 14382, National Bureau of Economic Research, Inc.
    10. Kertesi, Gábor & Kézdi, Gábor, 2012. "A roma és nem roma tanulók teszteredményei közti különbségekről és e különbségek okairól
      [The Roma/non-Roma test-score gap in Hungarian education]
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(7), pages 798-853.
    11. Gordon, Nora & Knight, Brian, 2009. "A spatial merger estimator with an application to school district consolidation," Journal of Public Economics, Elsevier, vol. 93(5-6), pages 752-765, June.
    12. Goldhaber, Dan & Destler, Katharine & Player, Daniel, 2010. "Teacher labor markets and the perils of using hedonics to estimate compensating differentials in the public sector," Economics of Education Review, Elsevier, vol. 29(1), pages 1-17, February.
    13. Torberg Falch & Bjarne Strøm, 2003. "Teacher Turnover and Non-Pecuniary Factors," Working Paper Series 3604, Department of Economics, Norwegian University of Science and Technology.

    More about this item

    JEL classification:

    • I2 - Health, Education, and Welfare - - Education
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:9878. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.