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Does Wage Regulation Harm Children? Evidence from English Schools

Author

Listed:
  • Jack Britton
  • Carol Propper

Abstract

Teacher wages are commonly set in a manner that results in flat wages across heterogeneous labor markets. Consequently teacher wages will be relatively worse in areas where local labor market wages are high. The implication is that teacher output will be lower in high outside wage areas. This paper exploits the centralized wage regulation of teachers in England to examine the effect of wages on school performance. It uses data on over 3000 schools containing around 200,000 teachers who educate around half a million children per year. We find that teachers respond to pay and schools add less value to their pupils where the regulation bites harder. Our calculations suggest that the removal of regulation would have positive social benefits.

Suggested Citation

  • Jack Britton & Carol Propper, 2014. "Does Wage Regulation Harm Children? Evidence from English Schools," The Centre for Market and Public Organisation 14/318, The Centre for Market and Public Organisation, University of Bristol, UK.
    • Handle: RePEc:bri:cmpowp:14/318
    as

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    File URL: http://www.bristol.ac.uk/cmpo/publications/papers/2014/wp318.pdf
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    References listed on IDEAS

    as
    1. Erik Hanushek & F. Welch (ed.), 2006. "Handbook of the Economics of Education," Handbook of the Economics of Education, Elsevier, edition 1, volume 1, number 1, June.
    2. Erik Hanushek & F. Welch (ed.), 2006. "Handbook of the Economics of Education," Handbook of the Economics of Education, Elsevier, edition 1, volume 2, number 2, June.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Teacher wages; Centralised Pay Regulation; School performance; School Value Added;
    All these keywords.

    JEL classification:

    • I2 - Health, Education, and Welfare - - Education
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J4 - Labor and Demographic Economics - - Particular Labor Markets

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