Weak Markets, Strong Teachers: Recession at Career Start and Teacher Effectiveness

Nagler, Markus; Piopiunik, Marc and West, Martin R. (July 2015): Weak Markets, Strong Teachers: Recession at Career Start and Teacher Effectiveness. Discussion Papers in Economics 2015-513

Abstract

How do alternative job opportunities affect teacher quality? We provide the first causal evidence on this question by exploiting business cycle conditions at career start as a source of exogenous variation in the outside options of potential teachers. Unlike prior research, we directly assess teacher quality with value-added measures of impacts on student test scores, using administrative data on 33,000 teachers in Florida public schools. Consistent with a Roy model of occupational choice, teachers entering the profession during recessions are significantly more effective in raising student test scores. Results are supported by placebo tests and not driven by differential attrition.

• Item Type: Paper
• Keywords: teacher value-added, talent allocation, business cycle, Roy model
• Faculties: Economics; Economics > Munich Discussion Papers in Economics; Special Research Fields > Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems > B5 - Weltwirtschaftliche Integration und die neue Firmenorganisation
• Subjects: 300 Social sciences > 330 Economics
• JEL Classification: E32, H75, I20, J24
• Language: English

References

Bacher-Hicks, A., T. J. Kane, and D. O. Staiger (2014): “Validating Teacher Effects Estimates Using Changes in Teacher Assignments in Los Angeles,” NBER Working Paper No. 20657.

Bacolod, M. P. (2007): “Do Alternative Opportunities Matter? The Role of Female Labor Markets in the Decline of Teacher Quality,” Review of Economics and Statistics, 89, 737–751.

Berman, J. and J. Pfleeger (1997): “Which Industries are Sensitive to Business Cycles?” Monthly Labor Review, 120, 19–25.

Boehm, M. J. and M. Watzinger (forthcoming): “The Allocation of Talent Over the Business Cycle and its Effect on Sectoral Productivity,” Economica.

Borjas, G. J. (2002): “The Wage Structure and the Sorting of Workers into the Public Sector,” NBER Working Paper No. 9313.

Chetty, R., J. N. Friedman, and J. E. Rockoff (2014a): “Measuring the Impacts of Teachers I: Evaluating Bias in Teacher Value-Added Estimates,” American Economic Review, 104, 2593–2632.

——— (2014b): “Measuring the Impacts of Teachers II: Teacher Value-Added and Student Outcomes in Adulthood,” American Economic Review, 104, 2633–2679.

Chingos, M. M. and P. E. Peterson (2011): “It’s Easier to Pick a Good Teacher than to Train One: Familiar and New Results on the Correlates of Teacher Effectiveness,” Economics of Education Review, 30, 449–465.

Chingos, M. M. and M. R. West (2012): “Do More Effective Teachers Earn More Outside the Classroom?” Education Finance and Policy, 7, 8–43.

Corcoran, S. P., W. N. Evans, and R. M. Schwab (2004): “Changing Labor-Market Opportunities for Women and the Quality of Teachers, 1957-2000,” American Economic Review Papers and Proceedings, 94, 230–235.

Dolton, P. J. (2006): “Teacher Supply,” in Handbook of the Economics of Education, ed. by E. A. Hanushek and F. Welch, Elsevier, vol. 2, chap. 19, 1079–1161.

Dolton, P. J. and O. D. Marcenaro-Gutierrez (2011): “If you Pay Peanuts do you get Monkeys? A Cross-Country Analysis of Teacher Pay and Pupil Performance,” Economic Policy, 26, 5–55.

Falch, T., K. Johansen, and B. Strom (2009): “Teacher Shortages and the Business Cycle,” Labour Economics, 16, 648–658.

Figlio, D. (1997): “Teacher Salaries and Teacher Quality,” Economics Letters, 55, 267–271.

Fitzpatrick, M. D. (forthcoming): “How Much Do Public School Teachers Value Their Pension Benefits?” American Economic Journal: Economic Policy.

Giuliano, P. and A. Spilimbergo (2014): “Growing Up in a Recession,” Review of Economic Studies, 81, 787–817.

Goldhaber, D. and J. Walch (2013): “Rhetoric Versus Reality: Is the Academic Caliber of the Teacher Workforce Changing?” CEDR Working Paper 2013-4.

Hanushek, E. A. and R. R. Pace (1995): “Who Chooses To Teach (and Why)?” Economics of Education Review, 14, 101–117.

Hanushek, E. A., M. Piopiunik, and S. Wiederhold (2014): “The Value of Smarter Teachers: International Evidence on Teacher Cognitive Skills and Student Performance,” NBER Working Paper No. 20727.

Hanushek, E. A. and S. G. Rivkin (2012): “The Distribution of Teacher Quality and Implications for Policy,” Annual Review of Economics, 4, 131–157.

Hanushek, E. A., G. Schwerdt, S. Wiederhold, and L. Woessmann (2015): “Returns to Skills Around the World: Evidence from PIAAC,” European Economic Review, 73, 103–130.

Harris, D. N. and T. R. Sass (2011): “Teacher Training, Teacher Quality and Student Achievement,” Journal of Public Economics, 95, 798–812.

Hoxby, C. M. and A. Leigh (2004): “Pulled Away or Pushed Out? Explaining the Decline of Teacher Aptitude in the United States,” American Economic Review Papers and Proceedings, 94, 236–240.

Hoynes, H., D. L. Miller, and J. Schaller (2012): “Who Suffers During Recessions?” Journal of Economic Perspectives, 26, 27–48.

Jackson, C. K. (2012): “Non-Cognitive Ability, Test Scores, and Teacher Quality: Evidence from 9th Grade Teachers in North Carolina,” NBER Working Paper No. 18624.

Jackson, C. K. and E. Bruegmann (2009): “Teaching Students and Teaching Each Other: The Importance of Peer Learning for Teachers,” American Economic Journal: Applied Economics, 1, 85–108.

Jackson, C. K., J. E. Rockoff, and D. O. Staiger (2014): “Teacher Effects and Teacher-Related Policies,” Annual Review of Economics, 6, 801–825.

Jones, J. and J. Schmitt (2014): “A College Degree is No Guarantee,” Working Paper, Center for Economic and Policy Research.

Kahn, L. B. (2010): “The Long-Term Labor Market Consequences of Graduating from College in a Bad Economy,” Labour Economics, 17, 303–316.

Kane, T. J., D. F. McCaffrey, T. Miller, and D. O. Staiger (2013): “Have We Identified Effective Teachers?” MET Project Research Paper, Bill & Melinda Gates Foundation.

Kane, T. J., J. E. Rockoff, and D. O. Staiger (2008): “What Does Certification Tell us About Teacher Effectiveness? Evidence from New York City,” Economics of Education Review, 27, 615–631.

Kane, T. J. and D. O. Staiger (2008): “Estimating Teacher Impacts on Student Achievement: An Experimental Evaluation,” NBER Working Paper No. 14607.

Kopelman, J. L. and H. S. Rosen (forthcoming): “Are Public Sector Jobs Recession-Proof? Were They Ever?” Public Finance Review.

Krueger, A. B. (1988): “The Determinants of Queues for Federal Jobs,” Industrial and Labor Relations Review, 41, 567–581. Lakdawalla, D. (2006): “The Economics of Teacher Quality,” Journal of Law and Economics, 49, 285–329.

Loeb, S. and M. E. Page (2000): “Examining the Link between Teacher Wages and Student Outcomes: The Importance of Alternative Labor Market Opportunities and Non-Pecuniary Variation,” Review of Economics and Statistics, 82, 393–408.

National Public Radio (2015): “Where Have All The Teachers Gone?” http://www.npr.org/blogs/ed/2015/03/03/389282733/where-have-all-the-teachers-gone, March 03.

New York Times (2010): “Teachers Facing Weakest Market in Years,” May 19. ——— (2015): “Fewer Top Graduates Want to Join Teach for America,” February 6.

Oreopoulos, P., T. vonWachter, and A. Heisz (2012): “The Short- and Long-Term Career Effects of Graduating in a Recession,” American Economic Journal: Applied Economics, 4, 1–29.

Oyer, P. (2006): “Initial Labor Market Conditions and Long-Term Outcomes for Economists,” Journal of Economic Perspectives, 20, 143–160.

——— (2008): “The Making of an Investment Banker: Stock Market Shocks, Career Choice, and Lifetime Income,” Journal of Finance, 63, 2601–2628.

Papay, J. P. and M. A. Kraft (forthcoming): “Productivity Returns to Experience in the Teacher Labor Market: Methodological Challenges and New Evidence on Long-Term Career Improvement,” Journal of Public Economics.

Rockoff, J. E. (2004): “The Impact of Individual Teachers on Student Achievement: Evidence from Panel Data,” American Economic Review Papers and Proceedings, 94, 247–252.

Rothstein, J. (2014): “Revisiting the Impacts of Teachers,” mimeo, University of California, Berkeley.

——— (2015): “Teacher Quality Policy When Supply Matters,” American Economic Review, 105, 100–130.

Roy, A. D. (1951): “Some Thoughts on the Distribution of Earnings,” Oxford Economic Papers, 3, 135–146.

Simpkins, J., M. Roza, and S. Simburg (2012): “What Happens to Teacher Salaries During a Recession?” Center on Reinventing Public Education.

Wiswall, M. (2013): “The Dynamics of Teacher Quality,” Journal of Public Economics, 100, 61–78.