The Effect of Employment Protection on Teacher Effort

In 2004, the Chicago Public Schools and the Chicago Teachers Union signed a new collective bargaining agreement that gave principals the flexibility to dismiss probationary teachers (those with fewer than 5 years of experience) for any reason and without the hearing process typical in many urban districts. Results suggest that the policy reduced annual teacher absences by roughly 10% and reduced the incidence of frequent absences by 25%. The majority of the effect was due to changes in the composition of teachers in the district, although there is evidence of modest incentive effects for young untenured teachers.