Association for Public Policy Analysis & Management

This paper develops a model of school climate and wage determination in the teacher labor market under the framework of a job search model where individuals search both teaching and non-teaching labor markets. School climate is taken to affect the school-teacher match in two ways. First it is seen as a teacher productivity enhancer in the sense that a good school environment provides the perfect conditions for teachers to perform best at their job and generate greater value added for their students. Second, in a context where teachers are constantly being evaluated by their value added measures, a good school environment could also affect the rate at which job matches terminate. The data used is the Beginning Teacher Longitudinal Study (BTLS), that follows a cohort of approximately 2000 beginning public school teachers for five years, and the model is estimated using Simulated Method of Moments. The initial evidence suggests that school climate affects both teacher productivity and job termination rates in the teaching sector. Several policy experiments are run in order to understand dynamics in the teacher labor market when parameters of interest change.