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Teacher Pension Plan Incentives, Retirement Decisions, and Workforce Quality

Author

Listed:
  • Shawn Ni

    (Department of Economics, University of Missouri-Columbia)

  • Michael Podgursky

    (Department of Economics, University of Missouri-Columbia)

  • Xiqian Wang

    (Department of Economics, University of Missouri-Columbia)

Abstract

We analyze late-career teacher turnover induced by pension incentives. Using longitudinal data with performance measures for Tennessee public school teachers, we find higher quality teachers are less likely to retire conditional on age and experience. To quantify the effects of pension incentives, we estimate a structural model for retirement and find that high quality teachers have a lower disutility for teaching relative to retirement. We use the structural estimates to simulate the effect of changes in retirement incentives. Enhancements to traditional plans accelerate teacher retirement, whereas targeted retention bonuses delay retirement and retain high quality teachers at relatively modest cost.

Suggested Citation

  • Shawn Ni & Michael Podgursky & Xiqian Wang, 2018. "Teacher Pension Plan Incentives, Retirement Decisions, and Workforce Quality," Working Papers 1815, Department of Economics, University of Missouri.
    • Handle: RePEc:umc:wpaper:1815
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    References listed on IDEAS

    as
    1. Cory Koedel & Michael Podgursky & Shishan Shi, 2013. "Teacher Pension Systems, the Composition of the Teaching Workforce, and Teacher Quality," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 32(3), pages 574-596, June.
    2. Raj Chetty & John N. Friedman & Jonah E. Rockoff, 2014. "Measuring the Impacts of Teachers I: Evaluating Bias in Teacher Value-Added Estimates," American Economic Review, American Economic Association, vol. 104(9), pages 2593-2632, September.
    3. Dan Goldhaber & Betheny Gross & Daniel Player, 2011. "Teacher career paths, teacher quality, and persistence in the classroom: Are public schools keeping their best?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 30(1), pages 57-87, December.
    4. Borsch-Supan, Axel & Hajivassiliou, Vassilis A., 1993. "Smooth unbiased multivariate probability simulators for maximum likelihood estimation of limited dependent variable models," Journal of Econometrics, Elsevier, vol. 58(3), pages 347-368, August.
    5. Brown, Kristine M., 2013. "The link between pensions and retirement timing: Lessons from California teachers," Journal of Public Economics, Elsevier, vol. 98(C), pages 1-14.
    6. Cory Koedel & Shawn Ni & Michael Podgursky, 2014. "Who Benefits from Pension Enhancements?," Education Finance and Policy, MIT Press, vol. 9(2), pages 165-192, March.
    7. Raj Chetty & John N. Friedman & Jonah E. Rockoff, 2014. "Measuring the Impacts of Teachers II: Teacher Value-Added and Student Outcomes in Adulthood," American Economic Review, American Economic Association, vol. 104(9), pages 2633-2679, September.
    8. Shawn Ni & Michael Podgursky, 2016. "How Teachers Respond to Pension System Incentives: New Estimates and Policy Applications," Journal of Labor Economics, University of Chicago Press, vol. 34(4), pages 1075-1104.
    9. Cory Koedel & Jiaxi Li & Matthew G. Springer & Li Tan, 2016. "The Impact of Performance Ratings on Job Satisfaction for Public School Teachers," Working Papers 1617, Department of Economics, University of Missouri.
    10. repec:tpr:journl:edfpol:v:10:y:2015:i:4:p:535-572 is not listed on IDEAS
    11. Wei Kong & Shawn Ni & Michael Podgursky & Weiwei Wu, 2018. "Pension Enhancements and Teacher Retirement Behavior," Working Papers 1814, Department of Economics, University of Missouri.
    12. Maria D. Fitzpatrick & Michael F. Lovenheim, 2014. "Early Retirement Incentives and Student Achievement," American Economic Journal: Economic Policy, American Economic Association, vol. 6(3), pages 120-154, August.
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    15. Robert M. Costrell & Michael Podgursky, 2009. "Peaks, Cliffs, and Valleys: The Peculiar Incentives in Teacher Retirement Systems and Their Consequences for School Staffing," Education Finance and Policy, MIT Press, vol. 4(2), pages 175-211, April.
    16. Harris, Douglas N. & Adams, Scott J., 2007. "Understanding the level and causes of teacher turnover: A comparison with other professions," Economics of Education Review, Elsevier, vol. 26(3), pages 325-337, June.
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    18. Matthew P. Steinberg & Lauren Sartain, 2015. "Does Teacher Evaluation Improve School Performance? Experimental Evidence from Chicago's Excellence in Teaching Project," Education Finance and Policy, MIT Press, vol. 10(4), pages 535-572, October.
    19. Robert M. Costrell & Josh B. McGee, 2010. "Teacher Pension Incentives, Retirement Behavior, and Potential for Reform in Arkansas," Education Finance and Policy, MIT Press, vol. 5(4), pages 492-518, October.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Teacher Pensions; Teacher Quality; Teacher Retirement;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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