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How much do teachers value compensation deferred for retirement (CDR)? This question is important because the vast majority of public school teachers are covered by defined benefit (DB) pension plans that “backload” a large share of compensation to retirement relative to the compensation structure in the private sector, and there is scant evidence about whether pension structures are consistent with teacher preferences for current compensation versus CDR. This study examines a unique setting in Washington State, where teachers are enrolled in a hybrid pension system that has both DB and defined contribution (DC) components. We exploit the fact that teachers have choices over their DC contribution rate to infer their revealed preferences for current versus CDR. We find that teachers on average contribute 7.23 percent of salary income toward retirement; 62 percent in fact elect to contribute more than the minimally required contribution of 5 percent. This suggests that teachers value CDR far more than suggested by prior evidence.
Working paper 242-0920 was originally released in September 2020 under the title "How Much do Teachers Value Deferred Compensation? Evidence from Defined Contribution Rate Choices". This is an updated version, released April 2021.
Citation: Dan Goldhaber, Kristian Holden (2020). How Much do Teachers Value Compensation Deferred for Retirement? Evidence from Defined Contribution Rate Choices. CALDER Working Paper No. 242-0920-2
Analyses of public policy issues often rely on administrative data collected by state and local governments. The reliability of such analyses is contingent on the quality of the data and it is tempting for researchers to take the accuracy of administrative data for granted. In this paper we show how this can lead to spurious research findings. Specifically, we use two sets of administrative data on teacher compensation to study the issue of salary spiking (where end-of-career spikes in compensation are used to boost pension benefits) in Washington State. We illustrate how discrepancies in the reporting of pensionable compensation can lead one to strikingly different conclusions about the prevalence and financial implications of salary-spiking behavior. Our findings point to the importance of understanding how data collection processes and administrative uses of the data may (fail to) incentivize accuracy in reporting.
Citation: Dan Goldhaber, Cyrus Grout, Kristian Holden (2018). Public Pensions and Salary Spiking: A Cautionary Tale of Data Inaccuracy Leading to Erroneous Results. CALDER Working Paper No. 202-0918-1
This paper examines the influence of teacher assistants and other personnel on student outcomes in elementary schools during a period of recession-induced cutbacks in teachers and teacher assistants. Using panel data from North Carolina, we exploit the state’s unique system of financing its local public schools to identify the causal effects of teacher assistants and other staff on student test scores in math and reading and other outcomes. We find strong and consistent evidence of positive contributions of teacher assistants, an understudied staffing category, with larger effects on outcomes for minority students than for white students.
Citation: Steven Hemelt, Helen Ladd (2017). Teaching Assistants and Nonteaching Staff: Do They Improve Student Outcomes? (Update). CALDER Working Paper No. 169
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.
Citation: Dongwoo Kim, Cory Koedel, Shawn Ni, Michael Podgursky (2017). Labor Market Frictions and Production Efficiency in Public Schools. CALDER Working Paper No. 166
Public school teachers retire much earlier than comparable professionals. Pension rule changes affecting new teachers can be used to close this gap in the long run, but any effects will not be observed for decades and the implications for workforce quality are unclear. This paper considers targeted incentive policies designed to retain experienced high-need teachers, of retirement age, as instruments to extend current teachers’ careers. We use structural estimates from a dynamic retirement model to simulate the workforce effects of targeted late-career salary bonuses and deferred retirement (DROP) plans using administrative data from Missouri. The simulations suggest that such programs can be cost-effective, partly because long-term pension savings offset a portion of upfront program costs. More generally, we demonstrate the utility of using structural retirement models to analyze fiscal and workforce effects of changes to public sector pension plans, since the effects of pension reforms cumulate over many years.
Citation: Dongwoo Kim, Cory Koedel, Shawn Ni, Michael Podgursky, Weiwei Wu (2017). Pensions and Late Career Teacher Retention (Update). CALDER Working Paper No. 164
We investigate the relationship between teacher licensure test scores and student test achievement and high school course-taking. We focus on three subject/grade combinations—middle school math, ninth-grade algebra and geometry, and ninth-grade biology—and find evidence that a teacher’s basic skills test scores are modestly predictive of student achievement in middle and high school math and highly predictive of student achievement in high school biology. A teacher’s subject-specific licensure test scores are a consistent and statistically significant predictor of student achievement only in high school biology. Finally, we find little evidence that students assigned to middle school teachers with higher basic-skills test scores are more likely to take advanced math and science courses in high school.
Citation: Dan Goldhaber, Trevor Gratz, Roddy Theobald (2016). What’s in a Teacher Test? Assessing the Relationship between Teacher Licensure Test Scores and Student Secondary STEM Achievement. CALDER Working Paper No. 158
We rely on natural experiments in North Carolina and Washington State, which previously extended time to tenure by one year, to estimate models that assess the relationship between the extended probationary period and absence and attrition outcomes for teachers affected by the new tenure laws. Across both states we find evidence of decreases in teacher absences for probationary teachers who are subject to the new extended tenure laws, and in Washington, we find a significant reduction in absences in the specific year in which tenure was extended. We find mixed evidence for teacher attrition and mobility.
Citation: Dan Goldhaber, Michael Hansen, Joe Walch (2016). Time to Tenure: Does Tenure Reform Affect Teacher Absence Behavior and Mobility? . CALDER Working Paper No. 172
Most public school teachers in the United States are enrolled in defined benefit (DB) pension plans. Using administrative micro data from four states, combined with national pension funding data, we show these plans have accumulated substantial unfunded liabilities – effectively debt – owing to previous plan operations. On average across state plans, over 10 percent of current teachers’ earnings are being set aside to pay for previously-accrued pension liabilities. This amounts to a large reduction in real operating spending per student. Our findings make clear that a significant fraction of the resources allocated toward teacher compensation in current public education budgets is not being invested in resources to educate today’s students at all.
August 2016 Update; Originally posted November 2015
Citation: Benjamin Backes, Dan Goldhaber, Cyrus Grout, Cory Koedel, Shawn Ni, Michael Podgursky, P. Brett Xiang, Zeyu Xu (2016). Benefit or Burden? On the Intergenerational Inequity of Teacher Pension Plans. CALDER Working Paper No. 148
In practice, teacher turnover appears to have negative effects on school quality as measured by student performance. However, some simulations suggest that turnover can instead have large, positive effects under a policy regime in which low-performing teachers can be accurately identified and replaced with more effective teachers. This study examines this question by evaluating the effects of teacher turnover on student achievement under IMPACT, the unique performance-assessment and incentive system in the District of Columbia Public Schools (DCPS). Employing a quasi-experimental design based on data from the first year years of IMPACT, we find that, on average, DCPS replaced teachers who left with teachers who increased student achievement by 0.08 SD in math. When we isolate the effects of lower-performing teachers who were induced to leave DCPS for poor performance, we find that student achievement improves by larger and statistically significant amounts (i.e., 0.14 SD in reading and 0.21 SD in math). In contrast, the effect of exits by teachers not sanctioned under IMPACT is typically negative but not statistically significant.
Citation: Melinda Adnot, Thomas Dee, Veronica Katz, James Wyckoff (2016). Teacher Turnover, Teacher Quality and Student Achievement in DCPS. CALDER Working Paper No. 153
Educators raise concerns about what happens to students when they are exposed to new teachers or teachers who are new to a school. These teachers face the challenge of preparing a year’s worth of new material, perhaps in an unfamiliar work environment. However, even when teachers remain in the same school they can switch assignments—teaching either a different grade or a different subject than they have taught before. While there exists some quasi-experimental literature on the effects for student achievement of being new to the profession (e.g., Rockoff, 2004) or to a school (Hanushek & Rivkin, 2010), to date there is little evidence about how much within-school churn typically happens and how it affects students. We use longitudinal panel data from New York City from 1974 to 2010 to document the phenomenon, and we tie assignment-switching behaviors to available student achievement in the period since 1999.
Citation: Allison Atteberry, Susanna Loeb, James Wyckoff (2016). High Rates of Within-School Teacher Reassignments and Implications for Student Achievement. CALDER Working Paper No. 151
Rising costs of public employee pension plans are a source of fiscal stress in many cities and states and have led to calls for reform. To assess the economic consequences of plan changes it is important to have reliable statistical models of employee retirement behavior. The authors estimate a structural model of teacher retirement using administrative panel data. A Stock-Wise option value model provides a good fit to the data and predicts well out-of-sample on the effects of pension enhancements during the 1990s. The structural model is used to simulate the effect of alternatives to the current defined benefit plan.
Citation: Shawn Ni, Michael Podgursky (2015). How Teachers Respond to Pension System Incentives: New Estimates and Policy Applications. CALDER Working Paper No. 147
We use data from workers in the largest public-sector occupation in the United States – teaching – to examine the effect of pension enhancements on employee retention. Specifically, we study a 1999 enhancement to the benefit formula for public school teachers in St. Louis that resulted in an immediate and dramatic increase in their incentives to remain in covered employment. To identify the effect of the enhancement on teacher retention, we leverage the fact that the strength of the incentive increase varied across the workforce depending on how far teachers were from retirement eligibility when it was enacted. Our results indicate that the St. Louis enhancement – which was structurally similar to enhancements that were enacted in other public pension plans across the United States in the late 1990s and early 2000s – was not a cost-effective way to increase employee retention.
Citation: Cory Koedel, P. Brett Xiang (2015). Pension Enhancements and the Retention of Public Employees: Evidence from Teaching. CALDER Working Paper No. 123
We use data from Washington state to examine two distinct stages of the teacher pipeline: the placement of prospective teachers in student teaching assignments and the hiring of prospective teachers into their first teaching positions. We find that prospective teachers are likely to complete their student teaching near their colleges and hometowns but prospective teachers’ student teaching positions are much more predictive of their first teaching positions than their hometowns. This suggests that the “draw of home” in new teacher hiring is driven by patterns in student teaching assignments. We also find that more qualified prospective teachers tend to student teach in more advantaged districts, suggesting that patterns in student teaching assignments may contribute to the inequitable distribution of teacher quality.
Citation: John Krieg, Roddy Theobald, Dan Goldhaber (2015). A Foot in the Door: Exploring the Role of Student Teaching Assignments in Teachers’ Initial Job Placements. CALDER Working Paper No. 144
Due to data limitations, very little is known about patterns of teacher cross-state mobility. The issue is important because barriers to cross-state mobility create labor market frictions that could lead both current and prospective teachers to opt out of the teaching profession. For this paper, we match state-level administrative data sets from Oregon and Washington and present evidence on patterns of in-service teacher mobility between these two states. We find levels of cross-state mobility that are drastically lower than levels of within-state mobility, even when accounting for proximity to the border. These findings are consistent with the hypothesis that there are significant penalties to cross-state mobility that may be attributable to state-specific licensure regulations, seniority rules and pension structures.
Citation: Dan Goldhaber, Cyrus Grout, Kristian Holden, Nate Brown (2015). Crossing the Border? Exploring the Cross-State Mobility of the Teacher Workforce. CALDER Working Paper No. 143
Public pension systems in many U.S. states face large funding shortfalls. Movement toward defined contribution (DC) pension structures may reduce the likelihood of future shortfalls. We address some limitations of the existing literature by studying public-sector employees who are enrolled in either a defined benefit (DB) plan or hybrid DB-DC plan, and who at some points have been able to choose between these plans. We find little evidence that the introduction of the hybrid plan increased employee turnover and that turnover is significantly lower among those who transferred from the DB plan to the hybrid plan.
Citation: Dan Goldhaber, Cyrus Grout, Kristian Holden (2015). Pension Structure and Employee Turnover: Evidence from a Large Public Pension System. CALDER Working Paper No. 142
We investigated the effects of a statewide program designed to increase the supply of teachers in “hard-to-staff” areas. The Florida Critical Teacher Shortage Program (FCTSP) had three elements: (a) it provided loan forgiveness to teachers who were certified and taught in designated shortage areas; (b) it compensated teachers for the tuition cost of taking courses to become certified in a designated shortage area; and (c) for a single year, it gave bonuses to high school teachers who were certified and taught in a designated subject area. Employing a difference-in-difference estimator, we find that the loan forgiveness program decreased attrition of teachers in shortage areas, although the effects varied by subject. Allowing for variation in the size of payments, we find that the effects were more pronounced when loan-forgiveness payments were more generous. A triple-difference estimate indicated the bonus program also substantially reduced the likelihood of teachers leaving the public school sector. A panel probit analysis reveals that the tuition-reimbursement program had modest positive effects on the likelihood a teacher would become certified in a designated shortage area. We also present qualitative evidence that loan-forgiveness recipients were of higher quality (as measured by value added) than nonrecipients who taught in the same subject but were not certified and thus ineligible.
Citation: Li Feng, Tim Sass (2015). The Impact of Incentives to Recruit and Retain Teachers in “Hard-to-Staff” Subjects: An Analysis of the Florida Critical Teacher Shortage Program. CALDER Working Paper No. 141
We examine the extent to which clustering large numbers of Teach For America (TFA) corps members in a limited number of low-performing schools was accompanied by changes in teacher mobility decisions. Using longitudinal data from Miami-Dade spanning six school years, augmented with survey responses from TFA’s own Alumni Survey for cohorts placed in the Miami region, we use Cox proportional hazards models and multinomial logit decision models in a modified difference-in-difference (DD) framework. Our results suggest that the increased concentration of TFA corps members in schools was associated with a reduction in TFA mobility across schools after the first year of service, but it did not affect the overall retention of corps members in the district after the two-year commitment. In addition, we find evidence suggesting non-TFA teachers in schools with a relatively high proportion of TFA corps members were significantly more likely to leave the district. We also find that TFA corps members retained beyond the two-year commitment performed substantially better in mathematics during their first two years of teaching: evidence of positive selection into postcommitment retention. Finally, we produce steady-state estimates of the minimum TFA effects necessary for the district to prefer hiring a TFA corps member relative to a non-TFA hire. TFA corps members in the district exceed this minimum value in both reading and mathematics.
Citation: Michael Hansen, Benjamin Backes, Victoria Brady (2015). Teacher Attrition and Mobility During the Teach For America Clustering Strategy in Miami-Dade County Public Schools. CALDER Working Paper No. 139
We investigate patterns of teacher mobility in districts with different collective bargaining agreement (CBA) transfer provisions. We use detailed teacher-level longitudinal data from Washington State to estimate the probability that teachers of varying experience and effectiveness levels transfer out of their schools to other schools in the district, to other districts, or out of Washington kindergarten through 12th grade (K–12) public schools. We find consistent evidence that within-district transfer probabilities increase for veteran teachers with the proportion of disadvantaged students in a school but decrease for novice teachers with the proportion of disadvantaged students, and that the strength of these relationships is associated with the strength of seniority transfer provisions in CBAs. Specifically, the pattern of veteran teachers’ leaving disadvantaged schools and novice teachers’ staying in disadvantaged schools is more pronounced in districts with strong CBA seniority transfer protections. CBA transfer provisions do not, however, appear to be an important factor in teacher transfers out of school districts or the K–12 public school workforce in Washington. Finally, we find some evidence that more effective teachers are more likely to stay in advantaged schools when seniority is not a factor in transfer decisions.
Citation: Dan Goldhaber, Lesley Lavery, Roddy Theobald (2015). Inconvenient Truth? Do Collective Bargaining Agreements Help Explain the Mobility of Teachers Within School Districts?. CALDER Working Paper No. 135
One consequence of the Great Recession is that teacher layoffs occurred at a scale previously unseen. In this paper we assess the effects of receiving a layoff notice on teacher mobility using data from Los Angeles and Washington State. We find strong evidence that the receipt of a layoff notice increases the likelihood that teachers leave their schools, even in the absence of actually losing their position due to a layoff. Placebo tests suggest that it is the layoff process that induces “structural churn” rather than differential mobility of the teachers who are targeted by this process.
Citation: Dan Goldhaber, Katharine O. Strunk, Nate Brown, David S. Knight (2015). Lessons Learned from the Great Recession: Layoffs an the RIF-Induced Teacher Shuffle. CALDER Working Paper No. 129
The relatively low status of teaching as a profession is often given as a factor contributing to the difficulty of recruiting teachers, the middling performance of American students on international assessments, and the well-documented decline in the relative academic ability of teachers through the 1990s. Since the turn of the 21st century, however, a number of federal, state, and local teacher accountability policies have been implemented toward improving teacher quality over the objections of some who argue the policies will decrease quality. In this paper we analyze 25 years of data on the academic ability of teachers in New York State and document that since 1999 the academic ability of both individuals certified and those entering teaching has steadily increased. These gains are widespread and have resulted in a substantial narrowing of the differences in teacher academic ability between high and low poverty schools and between white and minority teachers. We interpret these gains as evidence that the status of teaching is improving.
Citation: Hamilton Lankford, Susanna Loeb, Andrew McEachin, Luke Miller, James Wyckoff (2015). Who Enters Teaching? Encouraging Evidence that the Status of Teaching is Improving. CALDER Working Paper No. 124