Addressing Labor Shortages in a High-Friction Market: Evidence from Teaching

• In Event: New Evidence on Teacher Recruitment and Workforce Diversity

Abstract

Exacerbated by the COVID-19 pandemic, teacher shortages are a long-standing concern for schools and policymakers. Vacancies persist in specific fields (math, science, special education), rural and urban districts, and schools with low-performing and high-poverty students. To address vacancies states have devised various incentive programs, often designed to target specific teaching needs or types of schools. Such programs are typically temporary in nature and include bonuses, stipends, or indirect compensation such as loan forgiveness. The implementation and success of these initiatives is complicated by aspects of the teacher labor market including collective bargaining, licensing requirements, and rigid salary structures.

In March of 2023, Governor J.B. Pritzker announced an innovative and aggressive approach to addressing teacher shortages in Illinois, the Illinois Teacher Vacancy Grant Pilot Program. The TVGPP is designed to help school districts fill vacancies and is funded at a much higher level than initiatives with similar objectives in other states. The state selected 170 (of 830) districts to receive funding, covering 80 percent of the state’s teacher vacancies. Illinois will spend $135 million over the course of the 3-year program to fill approximately 2,800 vacancies, or just over $47,000 per vacancy. The program allows districts to locally determine the best use of funds.

Using administrative data on district staffing and enrollment from school years 2018 through 2025, I employ a synthetic difference-in-differences model to estimate the program’s impacts. I estimate its impacts on the student-teacher ratio, a need-adjusted measure of teacher staffing, plus two additional staffing measures – teacher full-time equivalents and new teachers hired.

Despite the high funding level and flexibility afforded districts in their use of funds, I find no evidence that the program has improved staffing outcomes in participating districts. The null findings are sufficiently precise to rule out moderate program impacts and are consistent across multiple measures of teacher staffing. States continue to look for answers to teacher staffing problems and financial incentive programs remain popular; the results of this work can inform the design of future policies.

Author

• JR Funk, University of Missouri-Columbia
  Presenting Author