The Labor Market for Teachers Under Different Pay Schemes

Barbara Biasi

NBER Working Paper No. 24813
Issued in July 2018, Revised in July 2018
NBER Program(s):Children, Economics of Education, Labor Studies

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.

Supplementary materials for this paper:

• online appendix

Acknowledgments

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Document Object Identifier (DOI): 10.3386/w24813