Does Wage Regulation Harm Kids? Evidence from English Schools

Carol Propper and Jack Britton ()

The Centre for Market and Public Organisation from The Centre for Market and Public Organisation, University of Bristol, UK

Abstract: Teacher wages are commonly subject to centralised wage bargaining. This results in flat teacher wages across heterogeneous labour markets and means teacher wages will be relatively lower where local labour market wages are high. The implication is that teacher output will be lower in high outside wage areas. This paper investigates whether this relationship between local labour market wages and school performance exists. We exploit the centralised wage regulation of teachers in England using data on over 3000 schools containing around 200,000 teachers who educate around half a million children per year. We find that regulation decreases educational output. Schools add less value to their pupils in areas where the outside option for teachers is higher. This is not offset by gains in lower outside wage areas.

Keywords: Teacher Wages; Centralised Pay Regulation; School Performance; School Value Added (search for similar items in EconPapers)
JEL-codes: I2 J3 J4 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2012-07
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:bri:cmpowp:12/293

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