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Teacher Compensation and Structural Inequality: Evidence from Centralized Teacher School Choice in Perú

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  • Matteo Bobba
  • Tim Ederer
  • Gianmarco León-Ciliotta
  • Christopher A. Neilson
  • Marco Nieddu

Abstract

We exploit data on the universe of public-school teachers and students in Per´u to es- tablish that wage rigidity makes teachers choose schools based on non-pecuniary factors, magnifying the existing urban-rural gap in student achievement. Leveraging a reform in the teacher compensation structure, we provide causal evidence that increasing salaries in less desirable locations is effective at improving student learning by attracting higher- quality teachers. We then build and estimate a model of teacher sorting across schools and student achievement production, whereby teachers are heterogeneous in their pref- erences over non-wage attributes and their comparative advantages in teaching different student types. Counterfactual compensation policies that leverage information about teachers’ preferences and value-added can result in a substantially more efficient and equitable allocation by inducing teachers to sort based on their comparative advantage.

Suggested Citation

  • Matteo Bobba & Tim Ederer & Gianmarco León-Ciliotta & Christopher A. Neilson & Marco Nieddu, 2021. "Teacher Compensation and Structural Inequality: Evidence from Centralized Teacher School Choice in Perú," Working Papers 1273, Barcelona School of Economics.
    • Handle: RePEc:bge:wpaper:1273
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    Cited by:

    1. Julien Combe & Umut Mert Dur & Olivier Tercieux & Camille Terrier & M. Utku Ünver, 2022. "Market Design for Distributional Objectives in (Re)assignment: An Application to Improve the Distribution of Teachers in Schools," Boston College Working Papers in Economics 1050, Boston College Department of Economics.
    2. Mariana Laverde & Elton Mykerezi & Aaron Sojourner & Aradhya Sood, 2023. "Gains from Reassignment: Evidence from A Two-Sided Teacher Market," Upjohn Working Papers 23-392, W.E. Upjohn Institute for Employment Research.
    3. Robert J. LaLonde & Robert H. Topel, 1992. "The Assimilation of Immigrants in the U. S. Labor Market," NBER Chapters, in: Immigration and the Work Force: Economic Consequences for the United States and Source Areas, pages 67-92, National Bureau of Economic Research, Inc.
    4. Nirav Mehta, 2022. "A Partial Identification Approach to Identifying the Determinants of Human Capital Accumulation: An Application to Teachers," University of Western Ontario, Departmental Research Report Series 20221, University of Western Ontario, Department of Economics.
    5. Bates, Michael & Dinerstein, Michael & Johnston, Andrew C. & Sorkin, Isaac, 2022. "Teacher Labor Market Equilibrium and Student Achievement," IZA Discussion Papers 15052, Institute of Labor Economics (IZA).
    6. Gielen, Anne C. & Webbink, Dinand, 2023. "Unexpected Colonial Returns: Self-Selection and Economic Integration of Migrants over Multiple Generations," IZA Discussion Papers 16065, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    inequality; teacher school choice; teacher wages; matching with contracts;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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