Regulatory Arbitrage in Teacher Hiring and Retention
Authors: Jesse M. Bruhn, Scott A. Imberman, & Marcus A. Winters
Charter schools typically have greater flexibility in their employment practices than do traditional public schools. However, it is not clear the extent to which charter schools capitalize on this comparative labor market flexibility to remove low value-added teachers or better retain high value-added teachers.
Jesse Bruhn, Scott Imberman, and Marcus Winters use longitudinal administrative data from Massachusetts to describe how the relationship between teacher value-added and attrition compares across charter and traditional public schools. Massachusetts is a particular interesting setting for this study because it is home to a fairly large and high-performing charter school sector.
The authors find that charter schools in Massachusetts are more likely to lose both their highest and lowest performing teachers than traditional public schools. Broadly speaking, attrition patterns in charter schools exhibit a U-shape with respect to teacher quality, while attrition in traditional public schools is not meaningfully related to teacher quality. The relationship between teacher quality and attrition appears to be a common feature of charter schools and is not significantly related to charter school impacts on student performance.
Intriguingly, where teachers who leave charter schools end up the following year differs by teacher value-added. Teachers that are high performing within their charter school tend to move to other public school employment opportunities. Lower performing teachers tend to exit the Massachusetts education system entirely.
Implications and Recommendations
The pattern of results suggest that charters act as a filtering mechanism by inducing their worst teachers to leave the education sector while also providing a pathway for high-quality teachers to enter the traditional public system. As one plausible explanation, the authors show that this pattern of results is what is predicted by a model of regulatory arbitrage in which traditional public schools are restricted through union rules and government regulation to require teaching licenses and pay a relatively high wage, while charters are not subject to these requirements and hence are free to hire unlicensed teachers at a lower wage.
The proposed model suggests that charter schools might in part contribute to the quality of education within a locality by providing an alternative pathway for teachers to enter the labor force and then selecting out the lowest-performers, thus increasing the supply of high-quality teachers available to teach in local public schools.