This study examines the effect of market fluctuations on teacher quality. Using reading and math scores of students who took the Florida Comprehensive Assessment Test between the 2000–2001 and 2008–2009 school years, the authors construct valued-added scores for thirty-three thousand Florida teachers, then test to see if a number of business cycle indicators (such as unemployment and GDP) predict these scores.
Based on these data, they estimate that teachers who enter the profession during a recession are more effective at teaching math and English language arts than non-recession teachers (by 0.10 and 0.05 standard deviations, respectively). They arrive at slightly larger estimates for male and minority teachers and those entering the profession later in life.
According to the authors, increases in the supply of effective teachers, rather than decreases in demand or differences in attrition, account for the superior quality of teachers hired during recessions. Presumably, these increases are driven by a decline in the quality of alternative employment opportunities for these individuals, some or all of which reflects a decline in their expected earnings relative to those of teachers.
Following this line of reasoning, the study bears two implications: First, recessions are a great time for the government or others to hire effective teachers. Second, regardless of the business cycle, we might be able to attract better teachers to the profession if we made teaching more attractive relative to the alternatives by paying new teachers more—although this doesn’t mean that simply increasing the wages of the existing teacher workforce would lead to better performance.
SOURCE: Markus Nagler, Marc Piopiunik, and Martin R. West, “Weak Markets, Strong Teachers: Recession at Career Start and Teacher Effectiveness,” National Bureau of Economic Research, Working Paper 21393 (July 2015).
