Do higher salaries yield better teachers and better student outcomes?

Cabrera, José María and Webbink, Dinand (2018): Do higher salaries yield better teachers and better student outcomes?

Abstract

We study the effects of a policy aimed at attracting more experienced and better qualified teachers in primary schools in disadvantaged neighborhoods in Uruguay. Teachers in these schools could earn higher salaries. Estimates from regression discontinuity models show that the policy increased experience by two to three years. The policy was especially successful in ‘hiring experience from other schools’, but also increased tenure. However, the effect on student outcomes appears to be small. The distinction between ‘hiring or keeping’ teachers seems important for explaining this result. Keeping teachers appears to be more beneficial for students than hiring experienced teachers. We also find that the effect of the policy is better for schools that replaced teachers with less than five years of experience.

• Item Type: MPRA Paper
• Language: Spanish
• Keywords: teacher salaries, teacher experience, student performance, disadvantaged students.
• Subjects: I - Health, Education, and Welfare > I2 - Education and Research Institutions; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J24 - Human Capital ; Skills ; Occupational Choice ; Labor Productivity

References

Aaronson, D., Barrow, L., Sander, W., 2007. Teachers and student achievement in Chicago public high schools. Journal of Labor Economics, 25, pp.95-135.

Abraham, K.G., H.S. Farber, 1987, Job Duration, Seniority, and Earnings. American Economic Review, 77 (3), pp. 278-297

Altonji, J.G. and R. A. Shakotko, 1987, Do Wages Rise with Job Seniority? Review of Economic Studies, 54 (3), pp. 437-459

Bénabou, R., F. Kramarz and C. Prost, 2009. The French zones d’éducation prioritaire: Much ado about nothing? Economics of Education Review, 28, pp.345–356.

Borghans, L., B.T. ter Weel, and B.A. Weinberg, 2008. Interpersonal styles and labor market outcomes. Journal of Human Resources, 43 (4), pp. 815-58.

Britton, J. and Propper, C., 2016. Teacher pay and school productivity: Exploiting wage regulation. Journal of Public Economics, 133, pp.75–89

Calonico, S., Cattaneo, M. and R. Titiunik, 2014. Robust Nonparametric Confidence Intervals for Regression-Discontinuity Designs. Econometrica, 82(6), pp.2295–2326.

Card, D. and A.A. Payne, 2002. School Finance reform, the distribution of school spending, and the distribution of student test scores. Journal of Public Economics, 83, pp.49-82.

Cattaneo, M., M. Jansson and X. Ma, 2017. Rddensity: Manipulation Testing based on Density Discontinuity, working paper.

Cattaneo, M.D., N.Idrobo, R. Titiunik, 2018. A practical introduction to Regression Discontinuity Designs: Volume I, Cambrigde University Press, forthcoming.

Chay, K.Y., P.J. McEwan and M. Urquiola, 2005. The Central Role of Noise in Evaluating Interventions That Use Test Scores to Rank Schools. American Economic Review, 95(4), pp.1237-1258.

Chetty, R., J.N Friedman, N. Hilger, E. Saez, D. Whitmore Schanzenbach and D. Yagan, 2011. How does you kindergarten classroom affect your earnings? Evidence from project STAR. Quarterly Journal of Economics, 126 (4), pp.1593-1660.

Chetty, R., J.N. Friedman and J.E. Rockoff, 2014. Measuring the Impacts of Teachers II: Teacher Value-Added and Student Outcomes in Adulthood. American Economic Review, 104(9), pp.2633-2678. 40

Clotfelter, C.T., H.F. Ladd and J.L. Vigdor, 2007. Teacher credentials and student achievement: longitudinal analysis with student fixed effects. Economics of Education Review, 26 (6), pp. 673–682.

Clotfelter, Ch., E. Glennie, H. Ladd and J. Vigdor, 2008. Would higher salaries keep teachers in high-poverty schools? Evidence from a policy intervention in North Carolina. Journal of Public Economics, 92 (5–6), pp.1352–1370.

Clotfelter, Ch., H. Ladd and J. Vigdor, 2011. Teacher mobility, school segregation, and pay-based policies to level the playing field. Educational Finance Policy, 6 (3), pp.399–438.

De Ree, J., K. Muralidharan, M. Pradhna and H. Rogers, 2018. Double for Nothing? Experimental Evidence on the Impact of an Unconditional Teacher Salary Increase on Student Performance in Indonesia, Quarterly Journal of Economics, 133 (2), pp. 993-1039.

Dolton, P. and O.D. Marcenaro-Gutierrez, 2011. If you pay peanuts do you get monkeys? A cross-country analysis of teacher pay and pupil performance. Economic Policy, 26 (65), pp.5–55.

Dolton, P. and W. van der Klaauw, 1995. Leaving teaching in the UK: a duration analysis. Economic Journal, 105 (429), pp.431–444.

Dolton, P. and W. van der Klaauw, 1999. The turnover of teachers: a competing risks explanation. Review of Economics and Statistics, 81 (3), pp.543–550.

Finan, F., B. A. Olken and R. Pande, 2015. The Personnel Economics of the State. Handbook of Economic Field Experiments, Forthcoming.

Frederikson, P., B. Ockert and H. Oosterbeek, 2013. Long-term effect of class size. Quarterly Journal of Economics, 128 (1), pp.249-285.

Gerritsen, S., Plug, E. and D. Webbink, 2017. Teacher quality and student achievement: Evidence from a sample of Dutch twins. Journal of Applied Econometrics, 32 (3), pp.643-660.

Gershenson, S, 2016. Linking teacher quality, student attendance, and student chievement. Education Finance and Policy, 11(2), pp. 125-149.

Gilpin, G.A., 2011. Re-evaluating the effect of non-teaching wages on teacher attrition. Economics of Education Review, 30 (4), pp.598-616.

Hanushek, E.A, 1997. Assessing the effects of school resources on student performance: an update. Educational Evaluation Policy Analysis, 19 (2), pp. 141–161. 41

Hanushek, E.A, 2003. The failure of input-based schooling policies. Economic Journal, 113 (485), pp.F64–F98.

Hanushek, E.A, J.F Kain and S.G. Rivkin, 2004. Why public schools lose teachers. Journal of Human Resources, 39 (2), pp.326–354.

Hanushek, E.A. and J.R. Rivkin, 2010. Generalizations about Using Value-Added Measures of Teacher Quality. American Economic Review: Papers & Proceedings, 100 (May 2010), pp.267–271

Hanushek, E.A., 2011. The Economic Value of Higher Teacher Quality. Economics of Education Review, 30(2), pp.466-479.

Harris, D.N. and T.R. Sass, 2011. Teacher training, teacher quality and student achievement. Journal of Public Economics, 95, pp.798-812.

Heckman, J.J., R. Pinto and P. Savelyev, 2013. Understanding the mechanism through wich an influential early childhood program boosted adult outcomes. American Economic Review. 103(6), pp. 2052-86.

Heckman, J.J. and Y. Rubinstein, 2001. The importance of non-cognitive skills: Lessons from the GED testing program. American Economic Review, 91(2), pp. 145-49.

Heckman, J.J., J.Stixrud and S.Urzua, 2006. The effects of cognitive and noncognitive abilities on labor market outcomes and social behavior. Journal of Labor Economics, 24(3), pp. 411-82.

Hendricks, M., 2014. Does it pay to pay teachers more? Evidence from Texas. Journal of Public Economics, 109, pp.50-63.

Imazeki, J., 2005. Teacher salaries and teacher attrition. Economics of Education Review, 24 (4), pp.431–449.

Jackson, C.K and E. Bruegmann, 2009. Teaching students and teaching each other: The importance of peer learning for teachers, American Economic Journal: Applied Economics, 1(4), 85-108.

Jackson, C.K., forthcoming. What do test scores miss? The importance of teacher effects on non-test-score outcomes, Journal of Political Economy

Jackson, C.K., R.C. Johnson and C. Persico, 2016. The effects of school spending on educational and economic outcomes: evidence from school finance reforms, Quarterly Journal of Economics, 157-218. 42

Kane, T.J. and D.O. Staiger, 2008. Estimating teacher impacts on student achievement: an experimental evaluation, NBER working paper no. 14607.

Krueger, A.B., 1999. Experimental estimates of education production functions. The Quarterly Journal of Economics, 114 (2), pp.497-532.

Ladd, H.F. and L.C. Sorenson, 2017. Returns to Teacher Experience: Student Achievement and Motivation in Middle School, Education Finance and Policy, 12(2), pp. 241–279.

Leuven, E., M. Lindahl, H. Oosterbeek and D. Webbink, 2007. The Effect of Extra Funding for Disadvantaged Pupils on Achievement. Review of Economics and Statistics, 89(4), pp.721-736.

Lindqvist, E. and R. Vestman, 2011. The labor market returns to cognitive and noncognitive ability: Evidence from the Swedish enlistment. American Economic Journal: Applied Economics, 3(1), pp. 101-28.

Loeb, S., Page, M., 2000. Examining the link between teacher wages and student outcomes: the importance of alternative labor market opportunities and nonpecuniary variation. Review of Economics and Statistics, 82 (3), pp. 393-408.

Manacorda, M., (2012). The cost of grade retention. Review of Economics and Statistics, 94 (2), pp.596-606.

Murnane, R.J. and R.J. Olsen, 1990. The effects of salaries and opportunity costs on length of stay in teaching: evidence from North Carolina. Journal of Human Resources, 25 (1), pp.106–124.

Ost, B., 2014. How do Teachers Improve? The Relative Importance of General and Specific Human Capital. American Economic Journal: Applied Economics, 6(2), pp. 127-151.

Papay, J.P. and M.A. Kraft, 2015. Productivity Returns to Experience in the Teacher Labor Market: Methodological Challenges and New Evidence on Long-Term Career Improvement. Journal of Public Economics, 130, pp.105-119.

Rivkin, S.G., E.A. Hanushek and J.F. Kain, 2005. Teachers, schools and academic achievement. Econometrica, 73 (2), pp.417-458.

Rockoff, J.E., 2004. The impact of individual teachers on student achievement: evidence from panel data. The American Economic Review: Papers & Proceedings, 94 (2), pp. 247-252.

Topel, R., 1991. Specific Capital, Mobility, and Wages: Wages Rise with Job Seniority, Journal of Political Economy, 99 (1), pp. 145-176

Urguiola, M., 2006. Identifying class size effects in developing countries: Evidence from rural Bolivia. Review of Economics and Statistics, 88 (1), pp.171-177.

Van der Klaauw, W., 2008. Breaking the link between poverty and low student achievement: An evaluation of Title I. Journal of Econometrics, 142, pp.731–756.

Wiswall, M., 2013. The dynamics of teacher quality. Journal of Public Economics, 100, pp.61-78.