Labor Market Behavior Actually Matters In Labor Market-Based Education Reform
Economist Jesse Rothstein recently released a working paper about which I am compelled to write, as it speaks directly to so many of the issues that we have raised here over the past year or two. The purpose of Rothstein’s analysis is to move beyond the talking points about teaching quality in order to see if strategies that have been proposed for improving it might yield benefits. In particular, he examines two labor market-oriented policies: performance pay and dismissing teachers.
Both strategies are, at their cores, focused on selection (and deselection) – in other words, attracting and retaining higher-performing candidates and exiting, directly or indirectly, lower-performing incumbents. Both also take time to work and have yet to be experimented with systematically in most places; thus, there is relatively little evidence on the long-term effects of either.
Rothstein’s approach is to model this complex dynamic, specifically the labor market behavior of teachers under these policies (i.e., choosing, leaving and staying in teaching), which is often ignored or assumed away, despite the fact that it is so fundamental to the policies themselves. He then calculates what would happen under this model as a result of performance pay and dismissal policies – that is, how they would affect the teacher labor market and, ultimately, student performance.*
Of course, this is just a simulation, and must be (carefully) interpreted as such, but I think the approach and findings help shed light on three fundamental points about education reform in the U.S.