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WORKING PAPER ALERT Charter schools are afforded extensive flexibility regarding their human capital management practices relative to other public schools. This flexibility can result in controversy via union opposition (see the recent failed expansion in MA).
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Reformers argue that this flexibility is essential to the charter model as it grants charters the opportunity to better retain their best teachers and also to better remove their worst teachers relative to highly regulated traditional public schools.
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In this paper, @imbernomics, @MarcusAWinters and I show that there is little support for this story empirically. Instead, we find attrition patterns that suggest some teachers use charters to explore teaching careers without incurring fixed costs associated with licensure.
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So how do we document this in the data?
First, we provide robust evidence of a u-shaped attrition pattern in the charter sector with respect to teacher value-added. By way of contrast, regular public schools exhibit a gentle downward slope.
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First, we provide robust evidence of a u-shaped attrition pattern in the charter sector with respect to teacher value-added. By way of contrast, regular public schools exhibit a gentle downward slope.
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This holds for inexperienced teachers who do not qualify for tenure in a TPS, and for experienced teachers who would. It is also true for teachers at low AND high VA charters. Hence it does not seem to be driven by TPS tenure rules nor quality differences across charters.
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Next, we show that in the charter sector, the destination of teachers who leave differs in important ways along the value-added distribution. The lowest VA charter teachers tend to leave the educator labor force, while the highest tend to move to regular public schools.
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We also document large gaps in licensure among charter and traditional public school teachers, and we show that the decision by a charter teacher to obtain a license is highly predictive of a permanent move to a traditional public school.
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We argue that these patterns can be explained via a kind of regulatory arbitrage. The same way that Uber is able to offer low wages to potential taxi drivers by running around medallion requirements, charters can reduce labor costs by running around licensure requirements.
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In turn, teachers are able to use the charter sector to explore a teaching career without committing to fixed costs associated with licensure.
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We formalize this in a model. We show that an equilibrium with low charter school pay plus high charter attrition (differentially in the tails) can result from teachers exchanging wages for option value. (Check out our cool diagram of the educator reaction curve)
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The model implies that even in the absence of competitive effects, charter schools create a positive externality for regular public schools by acting as a kind of filtering system which increases the average quality of the labor available to traditional public schools.
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