Year of Publication

2015

Degree Name

Doctor of Philosophy (PhD)

Document Type

Doctoral Dissertation

College

Business and Economics

Department

Economics

First Advisor

Dr. John E. Garen

Abstract

This dissertation adds to the literature that examines the effect of competition and school choice reform in elementary and secondary education. Specifically, we explore how three major forms of competition in U.S. schooling markets in Tiebout competition, charter competition, and private school competition affect the teaching profession by estimating a teacher wage equation and series of teacher characteristic equations. Since it has been well-established that all 3 forms of competition are likely endogenous, we present 2SLS estimates of competition’s effect in addition to simple OLS estimates. Our findings confirm the importance of studies controlling for endogeneity concerns, particularly in regards to teacher earnings. In nearly all instances, OLS yields estimates of the effects of competition on wages that are biased toward zero for each of the three measures.

Additional findings suggest that policies aimed at promoting competition and choice-based reforms might well benefit traditional public school (TPS) teachers through higher pay, while competition would likely have little significant effect on earnings for charter teachers. In particular, we find TPS teachers working in MSAs with the average Tiebout competition receive a pay boost of almost 16.8%, while a 10-percent increase in charter competition corresponds to a nearly 20% rise in teacher pay for TPS teachers. While competition might benefit teachers through higher pay, it is unclear as to whether competition would change the type of teachers schools attract. Few systematic results emerge when exploring teacher characteristics. Some of the more interesting results include Tiebout competition raising the prevalence of TPS teachers having a Bachelor’s in math, and charter competition reducing the incidence of state certification and unionization among TPS teachers. Finally, although competition appears to have few significant effects on charter teachers, substantial differences in pay and characteristics among charter teachers and TPS teachers exist. We document these differences.

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