Examining the Link between Teacher Wages and Student Outcomes: The Importance of Alternative Labor Market Opportunities and Non-Pecuniary Variation

Posted: 9 Nov 2003

See all articles by Susanna Loeb

Susanna Loeb

Stanford University; National Bureau of Economic Research (NBER)

Marianne Page

University of California, Davis

Abstract

Researchers using cross-sectional data have failed to produce systematic evidence that teacher salaries affect student outcomes. These studies generally do not account for non-pecuniary job attributes and alternative wage opportunities, which affect the opportunity cost of choosing to teach. When we employ the methodology used in previous studies we replicate their results. However, once we adjust for labor market factors, we estimate that raising teacher wages by ten percent reduces high school dropout rates by three to four percent. Our findings suggest that previous studies have failed to produce robust estimates because they lack adequate controls for non-wage aspects of teaching and market differences in alternative occupational opportunities

JEL Classification: I21, I22, J30, J31

Suggested Citation

Loeb, Susanna and Page, Marianne, Examining the Link between Teacher Wages and Student Outcomes: The Importance of Alternative Labor Market Opportunities and Non-Pecuniary Variation. Available at SSRN: https://ssrn.com/abstract=220969

Susanna Loeb (Contact Author)

Stanford University ( email )

School of Education 402P CERAS, 520 Galvez Mall
Stanford, CA 94305
United States
650-725-4262 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Marianne Page

University of California, Davis ( email )

One Shields Drive
Davis, CA 95616-8578
United States
530-752-1551 (Phone)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
1,237
PlumX Metrics