Career Concerns Incentives and Teacher Effort

I present a generalization to the standard career concerns model and apply it to the public teacher labor market. In particular, this model provides three testable hypotheses: optimal teacher effort levels decline with experience all things equal, optimal effort declines with tenure at a particular school, and teachers shirk as incentives collapse at the end of a teacher’s career or tenure. Using administrative data from North Carolina spanning 13 school years through 2007, I find significant changes in teacher absenteeism consistent with the generalized career concerns model. These findings are robust to various empirical specifications, showing consistent withinteacher behavioral changes. By exploiting exogenous variation in career concerns in the form of principal turnover, I find results consistent with the model’s predictions. I also investigate the effects of career concerns incentives breaking down, and find evidence suggestive of teacher shirking. While the career concerns effect is compounded with a learning curve early in a teacher's career, I find shirking among exiting teachers is significantly predictive of negative outcomes in student testing. JEL Classification: D23, I28, J30, J45 1 Office contact: 2101 N. 34 St. Suite 195, Seattle, WA 98103. E-mail: [email protected]. This paper is the first chapter of my Ph.D. dissertation for the Economics Department, and is my job market paper. The dissertation is titled “Studies on Teacher Labor, Quality Provision, and Policy Intervention,” and I expect to graduate in June 2009. I am grateful to Dan Goldhaber, Elaina Rose, Lan Shi, Judy Thornton, and Seik Kim for providing helpful assistance, and thank seminar participants at the University of Washington for their comments. I also thank the North Carolina Department of Public Instruction for collecting the data used in this study, and the North Carolina Education Research Data Center at Duke University, directed by Clara Muschkin, for its part in processing and securing this data resource. Finally, I thank Rebecca for her enduring support. The research presented here is supported by the Spencer Foundation. The views expressed in this paper do not necessarily reflect those of the University of Washington or the study’s sponsor. Any and all errors remain my own. Michael Hansen Career Concerns Incentives and Teacher Effort 2