Premium or Penalty? Labor Market Returns to Novice Public Sector Teachers

57 Pages Posted: 13 Nov 2017

See all articles by Juan Saavedra

Juan Saavedra

University of Southern California - Department of Economics; Center for Economic and Social Research (CESR)

Darío Maldonado

Universidad de los Andes, Colombia - School of Government

Lucrecia Santibanez

Claremont Colleges - Claremont Graduate University

Luis Omar Herrera Prada

World Bank

Date Written: November 2017

Abstract

It is unclear whether public sector teachers are under or overpaid relative to other occupations due to lack of knowledge about teachers’ outside labor market options and other unobserved attributes related to compensation. We estimate causal labor market returns to novice public teachers in Colombia. Our approach takes advantage of a national, standardized, teacher-screening exam, scores on which determine eligibility for public teaching jobs. We use four nationwide administrative data sources in a regression discontinuity approach to show that applicants who marginally pass the teacher screening test have greater annual earnings during the first three years of tenure than applicants below the passing cutoff. The total earnings effect is a combination of higher daily wages and greater labor supply, part of which is in outside, predominantly non-teaching jobs for a substantial fraction of public teachers. For infra-marginal high-scoring applicants, we show that being a public teacher in Colombia is as attractive, if not more, as for those at the margin. On the whole, rather than a penalty, public teachers in Colombia across all ability levels earn a substantial labor market premium early in their careers.

Institutional subscribers to the NBER working paper series, and residents of developing countries may download this paper without additional charge at www.nber.org.

Suggested Citation

Saavedra, Juan and Maldonado, Darío and Santibanez, Lucrecia and Herrera Prada, Luis Omar, Premium or Penalty? Labor Market Returns to Novice Public Sector Teachers (November 2017). NBER Working Paper No. w24012, Available at SSRN: https://ssrn.com/abstract=3070036

Juan Saavedra (Contact Author)

University of Southern California - Department of Economics ( email )

3620 South Vermont Ave. Kaprielian (KAP) Hall, 300
Los Angeles, CA 90089
United States

Center for Economic and Social Research (CESR)

635 Downey Way
Los Angeles, CA 90089-3332
United States

Darío Maldonado

Universidad de los Andes, Colombia - School of Government ( email )

Cra 1. No. 19 - 27. Bloque Aulas Tercer piso
Bogotá D.C.
Colombia

Lucrecia Santibanez

Claremont Colleges - Claremont Graduate University

Luis Omar Herrera Prada

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
0
Abstract Views
160
PlumX Metrics