Preferences, Selection, and the Structure of Teacher Pay

48 Pages Posted: 9 Mar 2020 Last revised: 4 Nov 2021

See all articles by Andrew C. Johnston

Andrew C. Johnston

University of California, Merced - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: February 14, 2020

Abstract

Human-capital formation in school depends largely on the selection and retention of teachers. I use a discrete-choice experiment to examine teacher preferences for compensation structure and working conditions, and I link responses to administrative records on teachers and student achievement. I calculate willingness-to-pay for a rich set of work attributes. High-performing teachers have similar preferences to other teachers, but they have stronger preferences for performance pay. Taking the preference estimates at face value in a model of teacher behavior, I explore how schools would structure compensation to meet various objectives. Under each objective, schools appear to underpay in salary and performance pay while overpaying in retirement. Restructuring compensation can increase both teacher welfare and student achievement.

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 Pay (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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