Union Reform, Performance Pay, and New Teacher Supply: Evidence from Wisconsin's Act 10

44 Pages Posted: 29 Jan 2019 Last revised: 18 May 2020

See all articles by E. Jason Baron

E. Jason Baron

Ford School of Public Policy, University of Michigan

Date Written: April 19, 2019

Abstract

This study examines the impact of performance pay on teacher selection. I exploit a shift toward performance pay in Wisconsin induced by the enactment of Act 10, which gave school districts autonomy to redesign their compensation schemes. Following the law, half of Wisconsin school districts eliminated salary schedules and started negotiating pay with individual teachers based on performance. Comparing the quantity of teaching degrees in Wisconsin institutions before and after Act 10, and relative to those in similar states in a difference-in-differences framework, I find that Act 10 led to a 20% increase in teaching degrees. This effect was entirely driven by the state's most selective universities, which suggests that the quality of the prospective teacher pool in Wisconsin increased as a result of the union reform. Consistent with improvements in new teacher supply, I show that the reform increased average test scores on the state's standardized exam by roughly 20% of a standard deviation four years after its implementation.

Keywords: Teachers' Unions, New Teacher Supply, Performance Pay, Salary Schedule

JEL Classification: I20, I28, J24, J31, J45, J51

Suggested Citation

Baron, E. Jason, Union Reform, Performance Pay, and New Teacher Supply: Evidence from Wisconsin's Act 10 (April 19, 2019). Available at SSRN: https://ssrn.com/abstract=3317540 or http://dx.doi.org/10.2139/ssrn.3317540

E. Jason Baron (Contact Author)

Ford School of Public Policy, University of Michigan ( email )

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