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Deregulating Teacher Labor Markets

Simon Burgess (), Ellen Greaves () and Richard Murphy ()
Additional contact information
Ellen Greaves: University of Bristol

No 12592, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: A common feature of public sector labor markets is the use of pay scales. This paper examines how the removal of pay scales impacts productivity, by exploiting a reform that compelled all schools in England to replace pay scales with school-designed performance related pay schemes. We find that schools in labor markets with better outside options for teachers saw relatively higher increases in teacher pay. Schools in these areas relatively increase their spending on teachers, have higher teacher retention and larger improvements in student tests scores. These effects are largest in schools with the high proportions of disadvantaged students. We conclude that the pay rigidities in the form of centralized pay schedules result in a misallocation of resources, by preventing such schools from retaining their teachers.

Keywords: pay scales; teachers; performance related pay; productivity (search for similar items in EconPapers)
JEL-codes: I28 J33 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2019-09
New Economics Papers: this item is included in nep-lma and nep-ure
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Journal Article: Deregulating Teacher Labor Markets (2022) Downloads
Working Paper: Deregulating Teacher Labor Markets (2019) Downloads
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