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The Misallocation of Pay and Productivity in the Public Sector: Evidence from the Labor Market for Teachers
June 10, 2015Poverty and Applied Microeconomics Seminar Series

Jishnu Das (Development Research Group, World Bank) will present the results of recent research.

Speaker: Jishnu Das is a Lead Economist in the Development Research Group of the World Bank. More »

Abstract: We combine a unique dataset of 1,388 teachers from 471 public schools to present among the first estimates of teacher value added (TVA) and its correlates in a low income country. There are three main findings. First, teacher quality matters more for student outcomes in these contexts than in OECD countries: moving a student from a teacher in the fifth percentile to the ninety-fifth percentile would lead to a 0.85 standard deviation increase in test scores, relative to a 0.33 increase in the United States. Second, observed teacher characteristics are closely linked to teacher compensation but explain no more than 5 percent of the variation in TVA. Finally, a policy change that shifted hiring from permanent to temporary contracts and reduced wages by 49 percent had no impact on the quality of new entrants, either immediately or after 4 years, suggesting that the supply of teachers is highly inelastic at current wages. The study confirms the importance of teachers in low income countries, extends previous experimental results on teacher contracts to a large-scale policy change and suggests evidence of significant misallocation between pay and productivity in the public sector.

Paper available at the seminar.

Last Updated: Jun 08, 2015

The Poverty and Applied Micro Seminar Series is a weekly series hosted by the World Bank's research department. The series invites leading researchers in applied microeconomics from the fields of poverty, human development and public service delivery, agriculture and rural development, political economy, behavioral economics, private sector development, and a range of other fields to present the results of their most recent research in a seminar format. The full list of seminars can be viewed here.

Event Details
  • Date: June 10, 2015
  • Location: World Bank Headquarters, MC3-570
  • Time: 12:30 - 2:00 p.m.
  • CONTACT: Anna Bonfield
  • abonfield@worldbank.org