Cluster-Seminar Public Finances and Living Conditions

This paper examines teacher job mobility using matcher employee-employer panel data from Stockholm municipality upper secondary schools. I utilize the exogenous change in upper secondary school admission which led to the sharp reshuffling of students within the municipality. This quasi experimental set up provides a unique opportunity to investigate the relationship between changes in student attributes and changes in teacher quality and turnover, which are not confounded with changes in school or neighborhood characteristics. Comparison of ordinary least squares and difference-in-differences estimates suggest that the former ones are severely biased and could provide a highly misleading, from policy perspective, conclusions. The causal estimates indicate that schools that experience upward shocks in student quality are more successful in retaining teachers, in particular, these that are more experienced and of high cognitive skills. Furthermore, I do find significant heterogeneity in the impact of minorities and principals compensatory behavior towards teachers. Nonetheless, the results suggest that student characteristics are endogenous to teacher turnover decisions.