Public school teachers retire much earlier than comparable professionals. Pension rule changes affecting new teachers can be used to close this gap in the long run, but any effects will not be observed for decades and the implications for workforce quality are unclear. This paper considers targeted incentive policies designed to deter retirement…

A vast research literature is devoted to analyzing causes of and potential remedies for early-career teacher attrition. However, much less attention has been paid to late-career attrition among experienced teachers, which is driven primarily by retirement plan incentives. Although there is some variation across states, it is generally the case…

Most public school teachers in the United States are enrolled in defined benefit (DB) pension plans. Using administrative micro data from four states, combined with national pension funding data, we show these plans have accumulated substantial unfunded liabilities -- effectively debt -- owing to previous plan operations. On average across 49…

If a rational system of teacher compensation, aimed at recruiting and retaining high-quality teachers, were designed from scratch, it is unlikely it would bear any resemblance to the system that is currently in place. In this paper, the author takes a deep look into how the method of paying teachers evolved. He shows that compensation systems have…

It is widely recognized that teacher quality is the central input in school performance. This insight has put human resource and compensation policies, including performance pay, tenure, alternative route recruitment, and mentoring, at center stage in school reform debates. Some school administrators have been innovators and reform leaders in…

The ongoing global financial crisis is forcing many employers, from General Motors to local general stores, to take a hard look at the costs of the compensation packages they offer employees. For public school systems, this will entail a consideration of fringe benefit costs, which in recent years have become an increasingly important component of…

Modern personnel economics emphasizes the importance of strategic, integrated compensation policy in an organization. In this paper I review key features of the compensation system for public school teachers. The rigidities and inefficiencies that arise from single salary schedules and other features of the compensation regime, and their…

In response to a journalist inquiry regarding research on funding of Ohio's teacher retirement system and its effect on school district finances, this analysis by the Thomas B. Fordham Institute points to serious questions and profound concerns about the health of Ohio's teacher pension system, and that similar time bombs may be ticking in other…

This paper examines the pattern of incentives for work versus retirement in five state teacher pension systems. We do this by examining the annual accrual of pension wealth from an additional year of work over a teacher's career. Accrual of wealth is highly nonlinear and heavily loaded at arbitrary years that would normally be considered…

Defined Benefit pension plans often generate odd time patterns of benefits. One typical pattern exhibits low accrual in early years, accelerating in mid-late years, followed by dramatic decline, or even negative returns in years that are relatively young for retirement. We consider four states for specific analysis: Arkansas, Missouri, California…

In this article we examine the economic case for merit or performance-based pay for K-12 teachers. We review several areas of germane research. The direct evaluation literature on these incentive plans is slender; highly diverse in terms of methodology, targeted populations, and programs evaluated; and primarily focused on short-run motivational…

Salaries and benefits for instruction are the largest component of school operating costs for public schools (U.S. Department of Education 2007). The level and structure of this compensation can play an important role in the recruitment and retention of a high-quality teaching workforce. Thus, detailed and reliable data on teacher pay and benefits…

In the flurry of activity surrounding the implementation of No Child Left Behind's (NCLB) student proficiency mandates, the federal requirement to have a "highly qualified" teacher in every classroom by 2005 seemed like an impossible goal. However, 2005 has come and gone and the highly qualified teacher crisis never happened. In this…

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…