Teacher Compensation in a Changing Labor Market: Evidence from Michigan 2005-2015

In the past decade, education reforms implemented high-stakes teacher evaluation, limited tenure protections, and restricted collective bargaining. Large increases in compensation may be needed to offset these losses in employment protections to attract and retain teachers. We test this hypothesis by examining the impact of a set of policy changes implementing teacher evaluation, tying teacher tenure to performance, and restricting collective bargaining on teacher compensation in Michigan. We also explore the extent to which exposure to charter school competition moderates the effects of these reforms due to the fiscal impacts of charter competition. We find no evidence that districts increased teacher compensation in response to these reforms that arguably removed substantial teacher protections. If anything, districts decreased teacher compensation. Our results also indicate that these effects did not vary with the amount of competition from charter schools.