My current research focuses on whether pension enhancement helps to retain late-career teachers, the effect of teacher pensions on teaching quality, and whether teacher mobility contributes to the difference in teacher quality between High-Poverty and Low-Poverty Schools.
Working Papers
"Teacher Pension Enhancements and Teacher Retirement" (Job Market Paper) Many states in the U.S. enhanced benefits in pension plans of public school teachers during the 1990s. The effects of pension enhancements on teacher’s retirement behavior have not been thoroughly studied. The pension of public school teachers in St. Louis experienced a major change in 1999, with a significant increase in the replacement factor and an introduction of a cap in pension benefits. I estimate a dynamic structural model, Stock-Wise option value model, using a panel administrative data of St. Louis teachers. The option value retirement model assumes that in the presence of serially correlated preference errors, the teachers are forward-looking and use current information making retirement decisions by comparing expected lifetime utility of retiring and staying. The model parameters represent teachers’ preference independent of pension rules, making the model a reliable tool for analyzing the long-term effects of pension rule changes and experimenting for alternative policies. Both in-sample and out-of-sample simulations show that the option-value model fits the data well. Simulations based on the model under different pension rules suggest that teachers respond to the incentives embedded in different pension plans. Specifically, increasing in the replacement factor and imposing the cap in pension benefits in the 1999 pension enhancement resulted in 1.7 years of reduction in the career of St Louis senior teachers. The approach implemented on the St Louis data can be used to analyze the effect of pension enhancements in other states and to evaluate impact of pension reforms.
As states attempt to staff public school classrooms with qualified teachers, primary attention has focused on educator preparation and early career retention. Far less research has examined the staffing consequences of turnover induced by teacher pension plans. This paper makes use of a unique longitudinal data file with performance measures for all public school teachers in Tennessee. Descriptive analysis finds that higher quality teachers are less likely to retire for a given age and service experience, and that the association is not due to teachers shirking immediately prior to retirement. To better understand the effects of pension plan incentives on workforce quality, we estimate a structural retirement model that explicitly allows for different work-retirement preferences for high and low quality teachers. We find that high quality teachers have a lower disutility for teaching as compared to retirement. Given that it costs less to keep high as compared to low quality teachers on the job, we use the structural estimates to simulate the effect of retention bonuses targeted to the former. One year retention bonuses produce an additional year of high quality teaching at a cost of roughly $40,000.
Work in Progress
"Teacher Mobility and Difference in Teacher Quality between High-Poverty and Low-Poverty Schools"
This study investigates the disparities in the workforce quality between high-poverty and low-poverty schools in Tennessee. Teacher mobility, either moving to a different schools in the same state or leaving the state, will redistribute the teachers with different quality. The study will utilize three longitudinal data files, including teacher demographic data, teacher quality evaluation data, and public school data in Tennessee.