The Labor Market for Teachers Under Different Pay Schemes

57 Pages Posted: 16 Jul 2018 Last revised: 19 Jul 2018

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Date Written: July 2018


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.

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Suggested Citation

Biasi, Barbara, The Labor Market for Teachers Under Different Pay Schemes (July 2018). NBER Working Paper No. w24813. Available at SSRN:

Barbara Biasi (Contact Author)

Yale School of Management ( email )

135 Prospect Street
P.O. Box 208200
New Haven, CT 06520-8200
United States

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