The Labor Market for Teachers under Different Pay Schemes

Compensation of most US public school teachers is rigid and solely based on seniority. This paper studies the effects a reform that gave districts in Wisconsin full autonomy to redesign teacher pay schemes. Following some switched flexible compensation. Using expiration preexisting collective bargaining agreements as source exogenous variation timing changes pay, I show introduction raised salaries high-quality teachers, increased quality (due arrival from other effort), improved student achievement. (JEL J31, J45, J52, H75, I21)