Teacher Pension Incentives and the Timing of Retirement

The rising costs and large unfunded liabilities of defined benefit (DB) teacher retirement systems raise questions about their efficacy and viability. Reform of teacher pension plans depends critically on reliable predictions of behavioral responses to alternative pension rules. We estimate an option-value model of individual teacher retirement using administrative data for Missouri teachers. The model fits the observed aggregate retirement behavior very well. We use the estimated structural parameters to simulate retirement behavior under alternative pension rules. Our simulations show that on net the enhancements of Missouri teacher pension benefits in the 1990's lowered the average retirement age for teachers. Conversion from the current DB plan to a defined contribution (DC) plan would have the opposite effect, and would dampen "spikes" in teacher retirement timing. The 1990's enhancements raised welfare for all teachers, however, the DC plan that we simulate has a mixed welfare impact, raising welfare for teachers near retirement but reducing it for teachers with less experience.teacher pensions, school staffing, school finance

K-12 public school finance in Missouri: an overview

Education ; Missouri

Charting a New Course to Retirement: How Charter Schools Handle Teacher Pensions

In this "Ed Short" from the Thomas B. Fordham Institute, Amanda Olberg and Michael Podgursky examine how public charter schools handle pensions for their teachers. Some states give these schools the freedom to opt out of the traditional teacher-pension system; when given that option, how many charter schools take it? Olberg and Podgursky examine data from six charter-heavy states and find that charter participation rates in traditional pension systems vary greatly -- from over 90 percent in California to less than one out of every four charters in Florida. As for what happens when schools choose not to participate in state pension plans, the authors find that they most often provide their teachers with defined-contribution plans (401(k) or 403(b)) with employer matches similar to those for private-sector professionals. But some opt-out charters offer no alternative retirement plans for their teachers (18 percent in Florida, 24 percent in Arizona)

Defrocking the National Board

This title is a review of: Bond, L., Smith, T., Baker, W. K., & Hattie. J. (2000). The certification system of the National Board for Professional Teaching Standards: A construct and consequential validity study, Center for Educational Research and Evaluation, University of North Carolina, Greensboro.The National Board for Professional Teaching Standards, through its series of comprehensive performance assessments of teaching proficiency, is identifying and certifying teachers who are producing students who differ in profound and important ways from those taught by less proficient teachers. So concludes this National Board-selected group of researchers in their study comparing National Board-certified teachers with teachers who were unsuccessful in their bid for certification. Although the federal government, states, school districts, and private foundations already have invested nearly $200 million in producing and rewarding National Board-certified teachers, this is the first study assessing whether the National Board has actually succeeded in identifying "expert" or "master" teachers who perform better than their uncertified peers

Is Teacher Pay “Adequate”?

In school finance lawsuits plaintiffs often claim that pay levels are not sufficient to recruit teachers who can deliver constitutionally-mandated levels of educational services. In this paper I consider several ways in which one might bring economic theory and data to bear on that question. I conclude that at present, and at least for the near term, education research cannot prescribe an “adequate” level of school spending on teachers, whether in the form of pay, benefits, or professional training, that can reliability predict a target level of student performance. If courts are predisposed to intervene in this matter, a more reasonable standard for “adequacy” is whether available revenues, when spent in an efficient manner, are sufficient to staff classrooms with appropriately-certified teachers in a flexible licensing regime that satisfies both state and federal teacher quality standards

Pension-Induced Rigidities in the Labor Market for School Leaders

Educators in public schools in the United States are typically enrolled in defined-benefit pension plans, which penalize across-plan mobility. We use administrative data from Missouri to examine how the mobility penalties affect the labor market for school leaders. We show that pension borders greatly affect leadership flows across schools – for two groups of schools separated by a pension border, our estimates indicate that removing the border will increase leadership mobility between them by 97 to 163 percent. We consider the implications of the pension-induced rigidities in the leadership labor market for schools near pension borders in Missouri. Our findings are of general interest given that thousands of public schools operate near pension boundaries nationwide.

Pension-Induced Rigidities in the Labor Market for School Leaders

Educators in public schools in the United States are typically enrolled in defined-benefit pension plans, which penalize across-plan mobility. We use administrative data from Missouri to examine how the mobility penalties affect the labor market for school leaders. We show that pension borders greatly affect leadership flows across schools – for two groups of schools separated by a pension border, our estimates indicate that removing the border will increase leadership mobility between them by 97 to 163 percent. We consider the implications of the pension-induced rigidities in the leadership labor market for schools near pension borders in Missouri. Our findings are of general interest given that thousands of public schools operate near pension boundaries nationwide.Educator pensions, backloaded compensation, principal quality, leadership quality, compensation in education

To Search or Not to Search: Female Labor Supply Following Job Displacement

Following permanent layoffs most women search for and secure new jobs, but some withdraw from the labor force. In this paper, the authors develop a joint model of the choice to engage in post-displacement job search and the distribution of unemployment duration for searchers, and estimate the model using data from the Displaced Worker Survey. Estimates of the resulting "split-population" model show that labor force withdrawal is an important factor explaining the distribution of jobless spells for women.Female; Job Search; Labor Supply; Unemployment Duration; Unemployment; Women

Market-Based Reform of Teacher Compensation

Compensation accounts for over ninety percent of instructional costs in public schools, yet the process for setting the level and structure of educator compensation is rarely rational or strategic. Ideally, total compensation and its components would be structured to recruit, retain, and motivate the highest quality professional workforce for a given level of expenditures. In this policy brief we examine two aspects of teacher compensation policy in K-12 education that are problematic; rigid salary schedules and retirement benefit systems