Working Paper: NBER ID: w18419
Authors: Jesse Rothstein
Abstract: Recent proposals would strengthen the dependence of teacher pay and retention on performance, in order to attract those who will be effective teachers and repel those who will not. I model the teacher labor market, incorporating dynamic self-selection, noisy performance measurement, and Bayesian learning. Simulations indicate that labor market interactions are important to the evaluation of alternative teacher contracts. Typical bonus policies have very small effects on selection. Firing policies can have larger effects, if accompanied by substantial salary increases. However, misalignment between productivity and measured performance nearly eliminates the benefits while preserving most of the costs.
Keywords: No keywords provided
JEL Codes: I21; J33
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| performance measurement (C52) | teacher recruitment (J45) |
| performance-based contracts (J33) | selection of high-ability teachers (A21) |
| firing policies (J63) | retention of effective teachers (I21) |
| increased firing rates (D87) | higher salaries to attract replacements (J39) |
| higher perceived risk of job loss (J63) | retention of effective teachers (I21) |
| misalignment between productivity and performance metrics (D29) | dilution of intended effects of firing policies (J63) |