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

Author

Listed:
  • Matteo Bobba

    (University of Toulouse Capito)

  • Tim Ederer

    (University of Toulouse Capito)

  • Gianmarco Leon-Ciliotta

    (Universitat Pompeu Fabra & Barcelona GSE & IPEG & CEPR)

  • Christopher A. Neilson

    (Princeton University)

  • Marco Nieddu

    (University of Cagliari & CRENoS)

Abstract
This paper studies how increasing teacher compensation at hard-to-staff schools can reduce structural inequality in the access to high-quality teachers. We first document dramatic inequities in schooling inputs and teacher quality to which students have access in the context of a large and diverse developing country: Peru. We then leverage a change in teacher compensation to show causal evidence that increasing salaries at less desirable public schools attracts better quality applicants and improves subsequent student test scores. We finally estimate a model of teacher preferences over local community amenities, school characteristics and wages using detailed job posting and application data from the country-wide centralized teacher assignment system. The fitted model is able to replicate the main features in the data, including the sorting patterns of teachers around the policy change in teacher wages. Model estimates indicate that while current pay bonuses in less desirable regions are helpful, the current policy is woefully insufficient to compensate teachers for the lack of school and community amenities, especially in school vacancies that are distant to the teachers’ home town or the location of their current job. Counterfactual experiments taking into account equilibrium sorting show that budget-neutral changes in the current wage schedule can achieve a remarkably more equitable distribution of teacher quality across regions.

Suggested Citation

  • Matteo Bobba & Tim Ederer & Gianmarco Leon-Ciliotta & Christopher A. Neilson & Marco Nieddu, 2021. "Teacher Compensation and Structural Inequality: Evidence from Centralized Teacher School Choice in Peru," Working Papers 648, Princeton University, Department of Economics, Industrial Relations Section..
    • Handle: RePEc:pri:indrel:648
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    Cited by:

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    2. 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.
    3. Michael Bates & Michael Dinerstein & Andrew C. Johnston & Isaac Sorkin, 2022. "Teacher Labor Market Equilibrium and Student Achievement," CESifo Working Paper Series 9551, CESifo.
    4. 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.
    5. 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.
    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

    Peru;

    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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