Competition and Teacher Pay

Great post by E. Frank Stephenson at "Divison of Labor."

"A couple of months back I had this letter run in the WSJ:

Why does Randi Weingarten (“Markets Aren't the Education Solution” April 25) assume that educational choice—markets—amounts to demonizing teachers? Currently, teacher pay largely depends on the number of years of experience and educational credentials obtained, factors that may not be strongly correlated with student achievement. Instead of a one scale fits all pay approach, teachers, at least the good ones, should benefit from a more competitive labor market in which school administrators could offer salaries commensurate with expected student performance rather than being determined by an arbitrary salary scale.

As if on cue, here's the abstract of a new NBER WP by C. Kirabo Jackson (emphasis added):

I analyze changes in teacher turnover, hiring, effectiveness, and salaries at traditional public schools after the opening of a nearby charter school. While I find small effects on turnover overall, difficult to staff schools (low-income, high-minority share) hired fewer new teachers and experienced small declines in teacher quality. I also find evidence of a demand side response where schools increased teacher compensation to better retain quality teachers. The results are robust across a variety of alternate specifications to account for non-random charter entry."