Constrained Job Matching: Does Teacher Job Search Harm Disadvantaged Urban Schools?

Search theory suggests that early career job changes on balance lead to better matches that benefit both workers and firms, but this may not hold in teacher labor markets characterized by salary rigidities, barriers to entry, and substantial differences in working conditions that are difficult for institutions to alter. Of particular concern to education policy makers is the possibility that teacher turnover adversely affects the quality of instruction in schools serving predominantly disadvantaged children. Although such schools experience higher turnover on average than others, the impact on the quality of instruction depends crucially on whether it is the more productive teachers who are more likely to depart. The absence of direct measures of productivity typically hinders efforts to measure the effect of turnover on worker quality. In the case of teachers, however, the availability of matched panel data of students and teachers, enables the isolation of the contributions of teachers to achievement despite the complications of purposeful choices of families, teachers, and administrators. The empirical analysis reveals that teachers who remain in their school tend to outperform those who leave, particularly those who exit the Texas public schools entirely. Moreover, this gap appears to be larger for schools serving predominantly low income students, evidence that high turnover is not nearly as damaging as many suggest. Eric A. Hanushek Hoover Institution Stanford University Stanford, CA 94305-6010 and NBER [email protected] Steven G. Rivkin Amherst College Department of Economics P.O. Box 5000 Amherst, MA 01002-5000 and NBER [email protected] Constrained Job Matching: Does Teacher Job Search Harm Disadvantaged Urban Schools? By Eric A. Hanushek and Steven G. Rivkin Policy discussions of teacher quality typically highlight the institution of tenure, barriers to entry into the profession, salary rigidities, seniority rules, and the importance of working conditions associated with school location and demographic composition to distinguish teacher labor markets from other occupations with fewer labor market rigidities. The unique structure of teacher labor markets is often thought to contribute to high early career turnover in schools serving disadvantaged populations and to impede efforts to raise the quality of education. Quite generally, turnover per se is thought to be bad, and exiting teachers are thought to be the more productive. These concerns stand in stark contrast to much of labor search theory, where early career turnover provides a mechanism for improving job matches that benefits both workers and firms. It may be that teacher labor markets lead to different outcomes, but it may also be the case that the concerns regarding turnover are misplaced. This paper provides direct evidence about the impacts of school job matching on productivity and student achievement. Although teacher labor markets may be structured differently from other occupations, high turnover is certainly not a distinguishing feature. The data suggest that exit rates from teaching mirror those in non-teaching occupations (Stinebrickner (2002), Ballou and Podgursky (2002)). Consequently, disproportionate harm from the turnover of teachers must come from the character of that turnover rather than simply the level, and there remains little evidence on productivity differences between teachers who transition out of a school and those that remain. In this paper we investigate the effects of turnover on the quality of instruction in a large urban district in Texas. The absence of direct measures of productivity typically hinders efforts to measure the effect of turnover on worker quality apart from the use of wage changes as an