This new NBER-working paper will maybe surprise some people. Actually, I was a bit at first when I found this via Freakonomics. In their analyses Maria Fitzpatrick and Michael Lovenheim found that offering early retirement to experienced schoolteachers doesn’t have a negative effect on students’ test scores, and even in some cases this can lead to an improvement. But hold your horses and don’t send those teachers home yet:
“These results raise a puzzle of why test scores would increase when large numbers of experienced teachers retire. It could be the case that there is adverse selection in who responds to the ERI opportunity. If the lowest-quality teachers are those whose employment is most elastic with respect to retirement incentives, test scores would increase as these teachers are replaced with newer ones. In such a case, our estimates yield information on the effect of ERI programs on student achievement, but it would be more difficult to use them to predict the effects of the large impending volume of teacher retirements due to the aging of the teacher workforce. Given available data, it is not possible to examine the underlying productivity of teachers taking up the ERI. But, the implication of our results is clear: offering expiring incentives for late career
teachers to retire does not harm student achievement on average.”
Abstract of the research:
Early retirement incentives (ERIs) are increasingly prevalent in education as districts seek to close budget gaps by replacing expensive experienced teachers with lower-cost newer teachers. Combined with the aging of the teacher workforce, these ERIs are likely to change the composition of teachers dramatically in the coming years. We use exogenous variation from an ERI program in Illinois in the mid-1990s to provide the first evidence in the literature of the effects of large-scale teacher retirements on student achievement. We find the program did not reduce test scores; likely, it increased them, with positive effects most pronounced in lower-SES schools.