School Choice Raises Demand for Teachers with Select Characteristics

Summary of working paper 7866
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School choice would ... raise the demand for teachers with select skills: teachers with a high caliber college education, with better math and science skills, with a high degree of independence, and those who put forth extra effort.

School choice takes many forms, including charter schools, vouchers, tax credits for private school tuition, and inter-district choice. Historically, teachers' organizations such as the National Education Association and the American Federation of Teachers have opposed school choice. But in Would School Choice Change the Teaching Profession? (NBER Working Paper No. 7866), author Caroline Hoxby finds that school choice would have some notable benefits for the teaching profession. It would raise the demand for teachers with select skills: teachers with a high caliber college education, with better math and science skills, with a high degree of independence, and those who put forth extra effort all would be in great demand. Certainly, school choice would result in some losers: the less skilled and motivated teachers would find less demand for their services.

Hoxby proposes the possibility that school choice ultimately would influence who became, and remained, a teacher by affecting schools' demand for certain characteristics. To determine which characteristics are demanded more by choice-based schools, she asks which are rewarded with a higher wage and are present in greater abundance. She analyzes data on traditional forms of school choice --selection of a private school and picking a public school by choosing a residence - and on a third form of choice, the charter school. She draws her data on traditional school teachers from a nationally representative random sample of public and private school teachers and administrators. For comparable information on charter schools, Hoxby distributed surveys for administrators and randomly selected teachers to every charter school in operation. The teachers and administrators were queried on a number of topics, including teachers' pay, required and actual hours of work, teaching experience, college background, and career plans.

Overall, the evidence suggests that school choice would require teachers to have higher levels of skills and to exhibit extra effort in return for a higher wage for those characteristics. Specifically, Hoxby discovers that traditional forms of school choice do increase the demand for teachers who were educated at select colleges, who have degrees in a subject (like history or English) as opposed to education, who have good math and science skills, and who are willing to work extra hours in addition to those required. Comparing charter schools to public schools, Hoxby finds that charter schools not only hire more teachers with these characteristics, but also that the incremental return to such characteristics (in terms of pay) is higher at charter schools. (Charter schools pay lower salaries on average than regular public schools do, but charter schools allow pay to vary more with teachers' characteristics.)

For example, public school teachers who graduated from very competitive colleges are paid 3.1 percent more than their colleagues, while charter school teachers from the same group of colleges are paid 6.6 percent more than their colleagues. Charter schools also demand more teachers who have majored in math and science: in the public schools, math and science majors are paid about 4.4 percent more but in charter schools they are paid about 8.4 percent more than their colleagues. In salaries, the average public school teacher earns $34,690; the average charter school teacher $32,070; and the average private school teacher $21,286.

Currently, skilled teachers are more likely to leave the profession early. Hoxby points out that, within a district, teachers with similar seniority and the highest level of college degrees are likely to receive roughly similar wages. But her research suggests that schools that face greater school choice retain skilled teachers longer. This may of course be a consequence of such teachers being paid more in districts that face stronger choice-based incentives to pay teachers according to their merit. Hoxby's research suggests that school choice could change the teaching profession in a way that many potential, and even established, teachers would like.

-- Marie A. Bussing-Burks