Unions, Salaries, and the Market for Teachers: Evidence From Wisconsin

• In Event: 54.018 - Promising Scholarship in Education: Dissertation Fellows and Their Research

Abstract

In my job market paper, titled “Unions, Salaries, and The Market for Teachers: Evidence from
Wisconsin” I study teachers’ labor markets. A careful study of teachers' labor demand and supply,
while extremely relevant for policy, is challenging due to a lack of variation in pay, as teacher
salaries are usually set using steps-and-lanes schedules based entirely on seniority and academic
credentials. This paper exploits the passage of Act 10 in Wisconsin in 2011, which changed the
scope of collective bargaining on teacher salaries, to study the effects of changes in pay on teachers'
labor market, and on the composition of the teaching workforce. The Act prohibited collective
bargaining on salary schedules, and limited it to base wages, de facto giving districts the freedom to
set salaries on an individual basis. As a result of this law some districts started to individually
negotiate salaries with each teacher (individual-salary), whereas other districts continued setting
salaries using seniority-based schedules (salary-schedule). I first document an increase in salary
dispersion in individual-salaries districts, driven mainly by teachers with less than 10 years of
seniority. I also show an increase in the correlation between salaries (conditional on seniority and
education) and teacher quality, measured using teacher value-added. I then study how teachers
responded to this change in the structure of salaries, focusing on mobility across districts and on
exit from public schools. I document a 100 percent increase in mobility rates, and a 50 percent
increase in exit rates.

Author

• Barbara Biasi, Stanford University