This paper studies how increasing teacher compensation at hard-to-staff schools can reduce inequality in access to qualified teachers. Leveraging an unconditional change in the teacher compensation structure in Peru, we first show causal evidence that increasing salaries at less desirable locations attracts better quality applicants and improves student test scores. We then estimate a model of teacher preferences over local amenities, school characteristics, and wages using geocoded job postings and rich application data from the nationwide centralized teacher assignment system. Our estimated model suggests that the current policy is both ineficient and not large enough to effectively undo the inequality of initial conditions that hard-to-staff schools and their communities face. Counterfactual analyses that incorporate equilibrium sorting effects characterize alternative wage schedules and quantify the cost of reducing structural inequality in the allocation of teacher talent across schools.
Inequality; Teacher School Choice; Teacher Wages; Matching with Contracts;
- J31: Wage Level and Structure • Wage Differentials
- J45: Public Sector Labor Markets
- I21: Analysis of Education
- C93: Field Experiments
- O15: Human Resources • Human Development • Income Distribution • Migration
Matteo Bobba, Tim Ederer, Gianmarco Leon-Ciliotta, Christopher Neilson, and Marco Nieddu, “Teacher Compensation and Structural Inequality: Evidence from Centralized Teacher School Choice in Peru”, TSE Working Paper, n. 21-1232, July 2021, revised March 2022.
TSE Working Paper, n. 21-1232, July 2021, revised March 2022