Working Paper: NBER ID: w30310
Authors: Michael Dinerstein; Isaac M. Opper
Abstract: What happens when employers screen their employees but only observe a subset of output? We specify a model with heterogeneous employees and show that their response to the screening affects output in both the probationary period and the post-probationary period. The post-probationary impact is due to their heterogeneous responses affecting which individuals are retained and hence the screening efficiency. We show that the impact of the endogenous response on both the unobserved outcome and screening efficiency depends on whether increased effort on one task increases or decreases the marginal cost of effort on the other task. If the response decreases unobserved output in the probationary period then it increases the screening efficiency, and vice versa. We then assess these predictions empirically by studying a change to teacher tenure policy in New York City, which increased the role that a single measure—test score value-added—played in tenure decisions. We show that in response to the policy teachers increased test score value-added and decreased output that did not enter the tenure decision. The increase in test score value-added was largest for the teachers with more ability to improve students' untargeted outcomes, increasing their likelihood of getting tenure. We estimate that the endogenous response to the policy announcement reduced the screening efficiency gap—defined as the reduction of screening efficiency stemming from the partial observability of output—by 28%, effectively shifting some of the cost of partial observability from the post-tenure period to the pre-tenure period.
Keywords: teacher tenure; screening; multitasking; educational policy; value-added
JEL Codes: D23; I21; J08; J24; J41
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| screening policy (J78) | teacher output (A33) |
| teacher response to screening policy (J78) | test score value-added (C52) |
| teacher response to screening policy (J78) | untargeted measures output (C67) |
| new tenure policy (M51) | teacher behavior (C92) |
| teacher behavior (C92) | cost of partial observability (D89) |