Teacher Pension Systems, the Composition of the Teaching Workforce, and Teacher Quality

Abstract

Teacher pension systems concentrate retirements within a narrow range of the career cycle by penalizing individuals who separate too soon or remain employed too long. The penalties result in the retention of some teachers who would otherwise choose to leave, and the premature exit of some teachers who would otherwise choose to stay. We examine the link between teachers’ pension incentives and workforce quality and find no evidence to suggest that the incentives raise quality. Given the large and growing costs associated with maintaining teacher pension systems, and the lack of evidence regarding their efficacy, experimentation by traditional and charter schools with alternative retirement benefit structures would be useful.

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