Working Paper: NBER ID: w29068
Authors: Matteo Bobba; Tim Ederer; Gianmarco Leonciliotta; Christopher Neilson; Marco G. Nieddu
Abstract: We exploit data on the universe of public-school teachers and students in Perú to establish that wage rigidity makes teachers choose schools based on non-pecuniary factors, magnifying the existing urban-rural gap in student achievement. Leveraging a reform in the teacher compensation structure, we provide causal evidence that increasing salaries in less desirable locations is effective at improving student learning by attracting higher-quality teachers. We then build and estimate a model of teacher sorting across schools and student achievement production, whereby teachers are heterogeneous in their preferences over non-wage attributes and their comparative advantages in teaching different student types. Counterfactual compensation policies that leverage information about teachers’ preferences and value-added can result in a substantially more efficient and equitable allocation by inducing teachers to sort based on their comparative advantage.
Keywords: teacher compensation; educational inequality; Peru; teacher quality; policy evaluation
JEL Codes: H52; I20; J3; J45; O15; R23; R58
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Policy setting salaries based on job postings (J31) | More cost-effective educational outcomes (I21) |
| Increasing salaries at less desirable locations (J62) | Attracts teachers who score 0.45 standard deviations higher on competency tests (J45) |
| Attracts teachers who score 0.45 standard deviations higher on competency tests (J45) | Average increase in student test scores by 0.33 to 0.38 standard deviations (I21) |
| Increasing salaries at less desirable locations (J62) | Increase in student test scores (I21) |
| The increase in teacher quality in high-wage vacancies (I24) | No reduction of qualified teachers in lower-wage schools (I24) |
| Teacher salaries (J45) | Higher student academic achievement in math and language (I24) |