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Labor Market Frictions and Production Efficiency in Public Schools
State-specific licensing policies and pension plans create mobility costs for educators who cross state lines. We empirically test whether these costs affect production in schools – a hypothesis that follows directly from economic theory on labor frictions – using geocoded data on school locations and state boundaries. We find that achievement is lower in mathematics, and to a lesser extent in reading, at schools that are more exposed to state boundaries. A detailed investigation of the selection of schools into boundary regions yields no indication of systematic differences between boundary and non-boundary schools along other measured dimensions. Moreover, we show that cross-district labor frictions do not explain state boundary effects. Our findings are consistent with the hypothesis that mobility frictions in educator labor markets near state boundaries lower student achievement.
Keywords: Teacher Pension, Teacher Licensing, Labor Mobility
Citation: Dongwoo Kim, Cory Koedel, Shawn Ni, Michael Podgursky (2017). Labor Market Frictions and Production Efficiency in Public Schools. CALDER Working Paper No. 166
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Research Area: Educator preparation and teacher labor markets