Why Public Schools Lose Teachers

I. Introduction

Teacher shortages have been a long ongoing concern on discussion, with the root cause such as difficulties in recruitment, availability of fully certified teachers, etc. varying over time and across logistics. In trying to resolve these, school officials opt to giving out compensations like higher loans, condoning student loans in exchange for teaching commitment, housing reserved for teachers, etc. – all of which aim to encourage existing teachers to stay, and appeal to new teacher applicants. However the success of such policies is contingent on the receptiveness of the supply (the teacher pool).
The inability to understand the factors of teacher labor supply is found to be one of the hurdles in developing efficient teacher labor market policies. The teacher labor supply comprises of various decisions based on a range of information and influences in different times. The paper focuses on those who are already teaching and consider their decisions.[1]
According to some studies[2] higher teacher compensation decreases the possibility that they leave the profession, specifically once the differences in alternative earnings opportunities are taken into account. However one setback for these studies is the limited availability of information on working conditions that may be linked with salary – that may actually lead to a biased result and a further decline in understanding the actual cases.
To gain a better understanding of the impact of salary and other school determinants on teacher movements a matched student/teacher panel data on Texas public elementary schools is used. Provided with the large number of teachers and teacher shifts in the data, teachers can be partitioned on the basis of experience, type of school community, ethnicity and other determinants and study differences in the sensitivity to salary and student attributes on the basis of teacher experience, race and ethnicity. It shows that teacher movements are much more robustly related to certain student features than to salary differentials. Schools attending to large numbers of academically disadvantaged, black or Hispanic pupils have a tendency to lose an ample portion of teachers annually both to other districts and out of the Texas public schools completely. A suggestion is that the supply curve seen by these districts noticeably varies from that experienced by middle and upper middle class communities wherein a far lower fraction of teachers aim to better their employment arrangement by transferring to another public school.

II. Determinants of Supply of Teachers

The labor supply of teachers for a particular district in a certain area is set to be a function of the wage and working condition in that district and the amenities and employment opportunities in the area.

A. Salaries
Teachers’ salaries are expected to differ within a district and such differences reflect the various components of teacher wage contracts involving experience, education, and other factors.

B. Alternative Earnings Opportunities and Amenities
One must consider the variations in the alternative opportunities for teachers, particularly competitions for specific teachers such as math and science teachers as opposed to those in other areas of expertise. There are empirical evidences that affirm the thinking that alternative earning opportunities affect teacher labor supply. Dolton and van der Klaauw (1995, 1999) and van der Klaaw (1997) examined the impact of such on teacher transitions and found evidence that opportunity wages have an impact on the likelihood of both entry in and exit from the profession. Their results were consistent to the work of Murnane and Olsen (1989, 1990).

C. Working Conditions
There have been discussions that there is more to teaching job than the general salary or incentives levels. According to Greenberg and McCall (1974) and Murnane (1981), teacher preferences somewhat influence the selection of schools. From Antos and Rosen (1975) study, it was observed that teacher may be willing to have lower wage in exchange for better conditions in their schools. Failure to consider the disparities in working and labor market conditions may serve as an explanation to the failure of other studies in identifying the core relationship between achievement and salaries (Loeb and Page, 1998).
The main component of the empirical analysis in the paper is the description of the movements of teachers across various types of schools and student populations in order to examine the inclinations of teachers and the how the compensations and earnings degree of differences is executed. Included are the four measures of student attributes that are possibly connected to teacher labor supply which are percent low income, percent black, percent Hispanic, and average student achievement grade. However, it is yet indefinite if these characteristics directly affect or serve as proxies for other factors in teacher decisions. Regardless, the estimates will recognize the schools experiencing the most difficulties in teacher labor market.

D. Personnel Policies
Although the link between wages and employment can be detected, it is not possible to theoretically conclude that the relationship is a “supply function” for teachers. Instead the district hiring and retention practices are significant components in the labor market for teachers. Ballou and Podgursky (1995, 1997) and Ballou (1996) used this in the interpretation of movements seen in the market, for instance, the observed negative relation between retention and salaries is consistent with the positively sloped supply curve and a positive relation between wages and likelihood that districts will not re-employ teachers.
The paper illustrates the changes in the wage from shifting districts in addition to the study of the likelihood that teachers leave schools. Furthermore, it is uncertain that the increase in pay or improvements in non-monetary compensations would be as great for involuntary as for voluntary job transitions, hence the observed changes in pay and other characteristics for school transfers must understate the gains of those who opt to shift schools. Likewise the relation between the possibility of resigning and salaries should be negative than that between the possibility of being laid off and salaries. Also the estimated relationship of quitting to salaries must underestimate the supply relationship.

III. The Texas Database

The ability to comprehend the nature and results of teacher labor market activities originates from the unique database developed under the UTD Texas Schools Project. In coordination with the Texas Education Agency (TEA) the project has combined various data sources to gather matched panel datasets on students and teachers. The samples comprise the Texas public school teachers in each year along with entire groups of Texas students which allow precise descriptions of the schools of each teacher’s employment.
The Public Education Information Management System, the TEA’s state-wide educational data base covers key demographic data (race, ethnicity, gender) for students and teachers, and also student’s eligibility for subsidized lunch. In addition it reports annual information on teacher experience, wage, education, class size, grade, population served and subject. Significantly, this database can be combined with information on both student and teacher accomplishment.
In 1993, the Texas Assessment of Academic Skills (TASS) was administered each spring to qualified students enrolled in grade three to eight. Several special education and limited English proficient pupils are excused from the assessment, as are other students for whom the test would not be educationally appropriate. In each year about 15 percent of students do not take the tests, which may be due to an exception or as a result of repeated absences on testing days. Empirical salary schedules are developed for each school district by means of the teacher micro data for 1993 to 1996. The salary information does not include the various special compensations for individual teachers.

IV. Teacher Mobility, Salaries and Student Demographics

There is a significant ambiguity on the weight that a school district has to enhance the supply and performance of the teachers through compensation, class size and other non-monetary job attributes.

A. Transitions Between and Within Districts (1993-1996)
One of the main goals is to distinguish the varying weights of salary and other factors of job attractiveness. It was observed that teachers were transferring.
Teachers are observed moving within districts, between districts, and out of Texas public schools entirely annually between 1993 and 1996. Importantly, we have information about salaries and student characteristics for both the sending and receiving schools for each transition.
On a general yearly basis of 79 percent of teachers stay in the same school, 14 percent leave Texas public schools, 4 percent transfer schools within districts and 3 percent change district. The estimates for leaving Texas public schools involve people exiting teaching in addition to people teaching either in private schools or outside of the state. Furthermore, the rapid expansion of the Texas economy and student population during the period certainly had influenced the teacher mobility.
Just like the general job turnover pattern found in the labor market, movements vary sharply according to teacher experience. Probationary teachers having zero to two years of experience have a higher mobility within and across districts, and almost twice more likely to exit Texas public schools than prime age teachers with 11 – 30 years experience and were found to have a higher percentage of staying. However, mobility accelerates as teachers approach retirement age as almost one-fourth of teachers with over thirty years of experience leave the Texas public schools each year. The national patterns of transitions across experience categories are somewhat similar to that of Texas.
On the other hand the patterns of mobility have a tendency to oppose the conventional knowledge that large urban districts are the proving ground for teachers, who transfer to suburban jobs when feasible. According to the data (limited to teachers transferring districts), among the teachers in large urban districts, most of those switching districts relocate to suburban schools, but as a whole, less than two percent of teachers in large urban school change districts each year. The total number of those entering is just faintly fewer than the number of those exiting urban districts. In this period the share of Texas teachers in urban districts increased, which means that the small net outflow of teachers from urban district is not just a reflection of the variation in the distribution of teaching positions across types of community.
A similar pattern of mobility is observed for the subsample of probationary teachers, wherein the net outflow from urban districts is minute.
In general comparison to probationary suburban teachers, probationary urban teachers are less probable to stay in the same schools by one percentage point and this is a gap identical for teachers of all levels of experience.
Two crucial distinctions between new teachers starting in urban and starting in suburban:
1. Probationary urban teachers are more likely to leave teaching than those in suburban districts by 3.5 percentage points
2. Probationary suburban teachers are rather more likely to just transfer schools within districts
The switch from rural districts shows a very clear pattern, as the bulk of movers transfer to a different rural district. Considerably smaller number of rural teachers goes to urban districts than the case wherein teachers are initially in urban or suburban districts.
These rates of movement amongst community types present no information on the definite changes in salary and student composition. 
Additional observations deal with relationship between pre-transfer and post-transfer wage and student attributes for teachers who change school districts.
The changes in salary are calculated by single years of experience, for instance the change in wage for transferring teacher with four years of experience is equal to the difference of the district mean salary of fifth year teachers in the new district and district mean salary of fifth year teachers in the old district, both computed in the year of the change. Note that the consistent salary schedule data for teachers with ten or fewer years of experience (which is approximately three-fourths of teachers transferring districts) is the only available data thus teachers with more experience are excluded from some of the discussion.
It was observed that generally probationary teachers who transfer increase their salaries relative to what they would get in their initial district. Male participants gain by about 1.4 percent in wage with a move, while women gain half that amount. The mean salary gain decreases with experience and the disparity is statistically insignificant for more experienced teachers. Amongst transferees with less than ten years of experience, the mean gain is 0.4 percent of the yearly salary at the time of the move.
Another finding is that there’s a strong evidence that teacher steadily prefer higher achieving, non-minority, non-low income students. The clearest and most steady finding is that of achievement across gender and experience groupings which illustrate that district mean achievement increases by about .08 standard deviations or three percentile points on the state distribution for the mean transferee.
Even though there is disparity across experience categories, black and Hispanic compositions of district decreased by 2.5 and 5 percent, respectively and the portion eligible for free or reduced lunch dropped by 6.6 percent. However, the mean changes cover significant heterogeneity, some may appear to be systematically linked to origin and destination community types, such as the strongest support for existence of compensating differentials comes from teachers who move between urban and suburban districts.
The result shows that teachers who shift from large urban to suburban schools experience average nominal salary losses of 0.65 percent, however the mean adjusted salary rises by 1.4 percent. Likewise, the adjusted salary[3] increment is three times as large as the raw salary increase for teachers who move across suburban districts.
Just like that of salary patterns there are striking changes in the district mean student attributes for teachers who transfer from urban to suburban districts, such as a 0.35 standard deviation or 14 percentile increase in average achievement and 15 to 20 percent decline in racial and ethnic concentrations. Also, among suburban districts the average achievement increases by more than one tenth of a standard deviation and there is a decline in the proportion of black, Hispanic and eligible for a subsidized lunch.
 Another observation shows little evidence those teachers who transfer from urban to suburban districts experience changes that go beyond the differential between district means thus implying that urban to suburban transferees seem to maintain the same relative positions in the two districts. However those who move within urban districts demonstrates a significant rise in mean achievement and a fall in percent minority and percent eligible for subsidized lunch. Those who change schools within urban districts seem to search for schools with fewer academically and economically disadvantaged students. These patterns appear to coincide with the commonly hypothesized placement of new teachers in the most difficult teaching conditions within urban districts along with an ability to switch locations as their experience progress (cf. Raymond, Fletcher, and Luque, 2001).
Note that while the typical movement increases average student achievement and lessens economically disadvantaged and nonwhite by a certain percent, there is a considerable differences among black, Hispanic and white teachers.  Black teachers tend to transfer school with higher black enrollment shares than their previous school not considering whether or not they switch districts. Alternatively, the mean percentage change for Hispanic teachers is quite similar in direction and scale to the changes experienced by teachers as a whole. Looking at the yearly changes, Kain and Singleton (1996) demonstrate that the moving patterns accrue and interact with new hiring to produce significant disparities in teacher characteristics for black and white students, even across campuses within individual districts. Also, the variation in the average test scores is much smaller for black and Hispanic teachers.
Since pattern of teachers’ mobility may reflect various teacher preferences, or may be derived from very diverse preferences for factors related to race or ethnicity, it is difficult to unravel the probable underlying mechanism for the outcomes of race/ethnic pattern in transferee. For instance if there is widespread residential segregation and teachers favor to work closer to their homes, blacks may rank predominantly black schools much more highly than Hispanic and white colleagues, other things equal. However, the teacher preference may not entirely drive the disparity by teacher ethnicity.
Another apparent pattern shows that teachers belonging in the top quartile of adjusted salaries are 3 percentages less likely to leave the public schools and roughly 1 percentage point less likely to change districts than teachers found in the bottom quartile schools.
The most striking disparities in school rates of movement are linked to student achievement. Schools in the bottom achievement quartile show a much higher teacher transition rates (with over 25 percent of teacher leave each year) than those in the top quartile (with only less than 20 percent exit).
The most prominent difference is in the likelihood of entirely leaving public schools. These differences show that the lowest achieving pupils are more likely to have teachers new to the school and to the profession.

B. Transition Regressions
Some of the observations also take into account the joint impact of the different influences, such as setting the likelihood of leaving a district as a function of the both teacher and district characteristics. Specifically, those with higher experience levels have generally opted to stay in their present district for a number of years regardless of district qualities, which would tend to decrease the connection between change probabilities and the involved district characteristics. Moreover, the calculated link between transitions and percentages of black and Hispanic are permitted to differ by teacher race and ethnicity.
Additional finding illustrates that higher salaries decrease the probability of leaving a district and the impact tends to reduce with experience.
The movement rate is also substantially linked to a number of student attributes involving average achievement, percent of black and Hispanic. Having higher mean student achievement considerably declines the probability of moving or leaving Texas public schools at experience levels. Non-black or Hispanic teachers are more prone to move given higher black and Hispanic enrollees, even though the only major effects are connected to percent black students for younger teachers. Conversely black and Hispanic teachers are less likely to move given higher the minority enrollment shares.
Finally there is little or no evidence that the likelihood of moving or leaving is systematically related to mean class size in any conditions thus causing doubts about the commonly hypothesized influence of smaller classes on teacher decision.
In terms of the salary variable, the estimated influence for probationary teachers declines by approximately two thirds in size following the inclusion of the fixed effects, while the estimates for teachers with six to ten years of experience increases by more than a factor of three.
Again with the inclusion of fixed effects, the estimated impacts of student mean test score on the probability of exiting a district incline to fall a little by 15 to 20 percent. It seems that some other characteristics of district are correlated with student mean achievement and teacher movements.
An additional result indicates that the salary relative to those staying is much more strongly linked to the probability of changing districts than to the probability of leaving the Texas public schools – such wage sensitivity for district transitions holds across all experience categories.  On the contrary, student achievement seems to be a much more crucial determinant of the likelihood of leaving schools. Whether teachers consider it harder or less gratifying, teaching lower achieving pupils is a strong factor in them deciding to exit Texas public schools, and the size of the influence holds across the full range of teacher experience.
As illustrated earlier, teaching in racially concentrated districts has a substantial impact on both the likelihood of exiting public schools completely and on the likelihood of changing districts. For white teachers, the influence on changing districts continues across the experience distribution, while the influence on leaving public schools is observed more in the earlier years. For black teachers, the feedbacks to varying concentrations of black pupils are almost precisely the opposite that for whites in both sign and size.

V. Conclusions

The outcomes substantiate the complexity that schools serving academically disadvantaged students have in maintaining teachers, mainly those early in their careers. There is also significant evidence that non-black/non-Hispanic teachers systematically favor non-black/non-Hispanic pupils, while the converse seems to be the case for black and Hispanic teachers. These observations conform to the widely publicized teacher scarcities affecting many of the nation’s inner city schools. The main concern is the size of the added return required to compensate for the disadvantages some schools must overcome so to compete for teachers. There was also little or no evidence that the impact of salaries diverges with student attributes and the likelihood that the effects of student attributes were non-linear, hence, the salary coefficients calculated provide the best estimates of the compensating differentials required to counterbalance the labor market shortcomings of certain schools. The estimates imply that higher salaries lessen the likelihood that teachers exit a district, and the scale of the impact has a tendency to be rather analogous across the experience levels with an interval from -0.1 to -0.3, indicating that, say, a ten percent salary increase (about two to three thousand dollars per year depending upon the district) would reduce moving out by at most three percent. Equivalently, a one standard deviation reduction in school mean achievement raises the probability of moving out by about one to two percent, and a ten percent rise in the proportion of black or Hispanic pupils increases the likelihood that non-black, non-Hispanic teachers leave further by one to two percent. Accordingly, schools serving a high percentage of pupils that are either black or Hispanic who are academically lacking might have to pay an extra 20, 30 or even 50 percent more in wage than those schools serving a primarily white or Asian, and academically advantaged students. However, evidently the availability of black or Hispanic teachers may considerably decrease the expenses of hiring for such schools.
Significantly the pattern of multinomial logit estimates implies that across the board wage hikes are unlikely to offset for the labor market shortcomings. It seems as if salaries relative to other districts rather than the absolute level of teacher salaries is the crucial factor, as wages appear to have a bigger impact on the likelihood of changing districts rather than leaving teaching in general.
 Moreover, enhancements in academic grounding in the means of better preschools or child care services may possibly have the indirect benefit of making schools more appealing to potential teachers. Learning more about the specific source of the link between teacher labor supply and the precise student features would present relevantly vital, policy information.
Lastly, this paper centers on the quantity of teacher movements with little or no consideration to quality. The actual cost of enhancing the quality of teaching, critically counts on the aspects of district hiring, retention and other personnel policies. Ballou (1997) questions that district systematically employ the best applicants available, indicating that instructional quality could be mended at little or no cost in terms of higher wage. The extent to which improved personnel policies would simply transfer teachers amongst schools rather than increase the general mean level of teaching is an enormously crucial issue that values additional research.



Source:
Eric A. Hanushek, John F. Kain, and Steven G. Rivkin, “Why Public School Lose Teachers”, NBER Working Paper 8599, November 2001.



[1] Variants in decision begins with pre-teaching phase (wherein it includes decision to undergo training for teaching), then proceeds to the application and job matching procedure, if and when hired at a certain school the career path is ascertained by the continuation and retention decisions of both teachers and schools. (Hanushek, Kain, and Rivkin (2001)).
[2] Such as Murnane and Olsen (1989, 1990) and Dolton and van der Klaauw (1995, 1999).
[3] Residuals from the regressions of the data provide salary measures adjusted for differences in working
conditions, amenities and local labor markets.

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