How Career Concerns Influence Public Workers' Effort

Brief

How Career Concerns Influence Public Workers' Effort

Evidence from the Teacher Labor Market
April 23, 2010

Abstract

This study presents a generalization to the standard career concerns model and applies it to the public teacher labor market. The model predicts that optimal teacher effort levels decline with both tenure at a school and experience, all things being equal. Using administrative data from North Carolina spanning 14 school years through 2008, the study finds significant changes in teacher sick leave consistent with the generalized career concerns model. There is evidence that observed behaviors cannot be due to the endogeneity of teacher mobility decisions alone as well as evidence suggestive of teacher shirking. In sum, teachers exert considerable discretion over their own effort levels in response to these incentives, with important policy implications.

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