Preferences, Selection, and the Structure of Teacher Compensation

103 Pages Posted: 9 Mar 2020 Last revised: 23 Mar 2021

See all articles by Andrew C. Johnston

Andrew C. Johnston

University of California, Merced - Department of Economics

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Date Written: February 14, 2020

Abstract

Human capital shapes income, inequality, and growth. In the public sphere, human-capital formation depends largely on the selection and retention of teachers. To understand selection and retention, I use a discrete-choice experiment to estimate teacher preferences for compensation structure, working conditions, and contracts. High-performing teachers have stronger preferences for schools offering performance pay, which implies it promotes positive selection. Under a variety of school objectives, schools appear to underpay in salary and performance pay while overpaying in retirement. The results suggest significant efficiency gains from restructuring compensation: teacher welfare and student achievement can be simultaneously improved.

Keywords: Teachers, Labor Markets, Compensation, Salaries, Pensions, Pay-for-performance, Teacher Selection,Teacher Retention, Class Size

JEL Classification: I20, J32, J45, M50

Suggested Citation

Johnston, Andrew C., Preferences, Selection, and the Structure of Teacher Compensation (February 14, 2020). Available at SSRN: https://ssrn.com/abstract=3532779 or http://dx.doi.org/10.2139/ssrn.3532779

Andrew C. Johnston (Contact Author)

University of California, Merced - Department of Economics ( email )

P.O. Box 2039
Merced, CA 95344
United States

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