Working Paper: NBER ID: w28530
Authors: Barbara Biasi; Chao Fu; John Stromme
Abstract: We study the equity-efficiency implication of giving school districts control over teacher pay using an equilibrium model of the market for public-school teachers. Teachers differ in their comparative advantages in teaching low- or high-achieving students. School districts, which serve different student bodies, use both wage and hiring strategies to compete for their preferred teachers. We estimate the model using data from Wisconsin, where districts gained control over teacher pay in 2011. We find that, all else equal, giving districts control over teacher pay would lead to more efficient teacher-district sorting but larger educational inequality. Teacher bonus programs that incentivize comparative advantage-based sorting, combined with bonus rates favoring districts with more low-achieving students, could improve both efficiency and equity.
Keywords: No keywords provided
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 |
|---|---|
| granting districts control over teacher pay (J45) | more efficient teacher-district sorting (J45) |
| more efficient teacher-district sorting (J45) | improving overall student achievement (I24) |
| granting districts control over teacher pay (J45) | increasing educational inequality (I24) |
| increasing educational inequality (I24) | widening the achievement gap (I24) |
| teacher bonus programs (M52) | enhance both efficiency and equity in educational outcomes (I24) |
| flexible pay regimes (J33) | improved matching of teachers to districts based on comparative advantages (J45) |
| advantaged districts attracting more effective teachers (J45) | exacerbating inequalities (I24) |