Studies: Teachers Unions Hurt Students’ Future Earnings, Employment (Minorities Hardest Hit)

From From Jay P. Greene's Blog.

"(Guest Post by Jason Bedrick)

At this week’s annual meeting of the prestigious American Economic Association, Stanford economist Caroline Hoxby chaired a paper session titled, “New Evidence on the Effects of Teachers’ Unions on Student Outcomes, Teacher Labor Markets, and the Allocation of School Resources.”

I haven’t read these studies yet, so I won’t provide any commentary on them, but I figured JayBlog readers would be interested to see these two papers in particular:

“The Long-run Effects of Teacher Collective Bargaining” by Michael Lovenheim (Cornell University) and Alexander Willen (Cornell University)
This paper presents the first analysis of the effect of teacher collective bargaining on long-run labor market and educational attainment outcomes. Our analysis exploits the different timing across states in the passage of duty-to-bargain laws in a difference-in-difference framework to identify how exposure to teacher collective bargaining affects the long-run outcomes of students. Using American Community Survey (ACS) data linked to each respondent’s state of birth, we examine labor market outcomes and educational attainment for 35-49 year olds. Our estimates suggest that teacher collective bargaining worsens the future labor market outcomes of students: living in a state that has a duty-to-bargain law for all 12 grade-school years reduces earnings by $800 (or 2%) per year and decreases hours worked by 0.50 hours per week. The earnings estimate indicates that teacher collective bargaining reduces earnings by $199.6 billion in the US annually. We also find evidence of lower employment rates, which is driven by lower labor force participation, as well as reductions in the skill levels of the occupations into which workers sort. The effects are driven by men and nonwhites, who experience larger relative declines in long-run outcomes. Using data from the 1979 National Longitudinal Survey of Youth, we demonstrate that collective bargaining leads to sizable reductions in measured cognitive and non-cognitive skills among young adults. Taken together, our results suggest laws that support collective bargaining for teachers have adverse long-term labor market consequences for students. [emphasis added]

In short, the paper finds evidence that teachers unions’ collective bargaining reduce the future level of employment and earnings of students, especially minorities.
But wait, there’s more!

“Unions, Salaries, and the Market for Teachers: Evidence From Wisconsin” by Barbara Biasi (Princeton University)
A careful study of teachers’ labor demand and supply, while extremely relevant for policy, is challenging due to a lack of variation in pay, as teacher salaries are usually set using steps-and-lanes schedules based entirely on seniority and academic credentials. This paper exploits the passage of Act 10 in Wisconsin in 2011, which changed the scope of collective bargaining on teacher salaries, to study the effects of changes in pay on teachers’ labor market, and on the composition of the teaching workforce. As a result of this law some districts started to individually negotiate salaries with each teacher, whereas other districts continued setting salaries using seniority-based schedules. I first document an increase in salary dispersion in individual-salaries districts, and show that it is correlated with teacher value-added. Teachers responded to changes in pay by sorting across districts or by exiting: I find a 34 percent increase in quality of teachers moving from salary-schedule to individual-salary districts, and a 17 percent decrease in quality of teachers exiting individual-salary districts. Building from this reduced-form evidence, I estimate the parameters of teachers’ labor supply and demand using a two-sided choice model. Simulating the model on different salary schemes shows that an increase in the quality component of salaries in one district is associated with an improvement in average quality of the teaching workforce, driven by both in-movements of higher-quality teachers and out-movements and exits of lower-quality teachers. An increase in all districts is, however, associated with a smaller improvement, entirely attributable to exits of lower-quality teachers. [emphasis added]

In other words, the study finds that, after enacting Act 10, high-quality teachers in Wisconsin tended to move to districts that paid them based on their individual performance, whereas low-quality teachers gravitated to districts that paid for them staying alive an additional year.

Whether these findings are robust or generalizable is an open question that I’ll leave it to others to debate. But I do hope that these studies receive the consideration that they deserve."