Association for Public Policy Analysis & Management

Many states have begun to challenge traditional tenure protections that provide permanent employment status where teachers cannot be fired for poor performance or many other reasons without a burdensome administrative process. Sixteen states now require that teaching effectiveness be used in tenure decisions, as opposed to basing the decision solely on experience; seven states have enacted laws that allow districts to remove tenure protections from teachers not meeting performance standards; and three states have passed laws that effectively eliminate tenure and/or due process rights for teachers (Thomsen, 2016).

Recent research has shown that these sorts of tenure reforms lead to higher rates of teacher exit, especially for less effective teachers and for teachers who are offered attractive alternatives. These studies track individual teacher responses to tenure reforms. However, in order to stem teacher exits – especially when it is not just the ineffective teachers who leave the profession – school districts will likely respond. To date, there has been little research assessing organizational responses to tenure reforms that change the supply of teacher labor.

In this paper, we use Louisiana as a case in which to examine how the removal of tenure protections influences teacher compensation, which is largely dictated by salary schedules negotiated between teachers’ unions and school districts. In 2012, Louisiana effectively eliminated teacher tenure, replacing the lifetime teaching credential (previously earned after three years on the job) with a five-year license dependent on evaluation ratings. We ask if school districts in Louisiana attempted to compensate teachers for the loss of tenure by increasing salaries, and, if so, whether those increases were related to demonstrated teacher effectiveness. Using a panel of teacher-level administrative data that tracks Louisiana teachers from the 2002-03 school year (10 years before the removal of tenure protections) through 2013-14 (two years after the tenure policy change), we assess how salaries changed in Louisiana after the tenure reform. We then compare all school districts in Louisiana to the schools in New Orleans, which are almost entirely operated as charter schools, and thus not subject to negotiated salary schedules or tenure laws (charter teachers were never granted tenure). Using a difference-in-difference model, we examine how salaries changed for teachers who experienced tenure loss relative to those who did not.

Preliminary results suggest that there was an increase in average salaries post-tenure reform and that these increases were largely due to salary bumps for more effective teachers. When we compare Louisiana teachers to New Orleans teachers, we find that charter teachers’ salaries did not change post-tenure reform. However, teacher salaries in charter schools are responsive to demonstrated teacher effectiveness.

These results provide further context for earlier findings regarding teacher attrition rates post-tenure reform. It is likely that earlier estimates are moderated by the fact that school districts responded through increased salaries in an attempt to offset the loss of tenure. This has important implications for states considering policies that would restructure or eliminate tenure and offers a potential solution for addressing potential negative consequences of such reforms.