Working Paper: NBER ID: w24813
Authors: Barbara Biasi
Abstract: Compensation of most US public school teachers is rigid and solely based on seniority. This paper studies the labor market effects of a reform that gave school districts in Wisconsin full autonomy to redesign teacher pay schemes. Following the reform, some districts switched to flexible compensation and started paying high-quality teachers more. Teacher quality increased in these districts relative to those with seniority pay due to a change in workforce composition and an increase in effort. I estimate a structural model of this labor market to investigate the effects of counterfactual pay schemes on the composition of the teaching workforce.
Keywords: Teacher Pay; Labor Market; Education Policy; Value-Added; Teacher Quality
JEL Codes: I20; J31; J45; J51; J61; J63
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Act 10 reform (E69) | flexible pay schemes (FP) (J33) |
| flexible pay schemes (FP) (J33) | teacher quality (A21) |
| flexible pay schemes (FP) (J33) | high-value-added (VA) teachers salary increases (A29) |
| high-value-added (VA) teachers salary increases (A29) | teacher quality (A21) |
| teacher movements (J62) | flexible pay (FP) districts (J33) |
| lower VA teachers exit labor market (J45) | flexible pay (FP) districts (J33) |
| teacher effort changes (D29) | teacher quality (A21) |
| workforce composition changes (J21) | teacher quality (A21) |