When the Walls Come Down: Evidence on Charter Schools’ Ability to Keep Their Best Teachers Without Unions and Certification Rules

Abstract

Theories of market-based school reform suggest that teacher labor markets may be inefficient because schools lack autonomy to incentivize performance in hiring, retention, and compensation. We test this empirically by comparing teacher exits in the deregulated market of New Orleans with neighboring traditional school districts. We find that the relationship between teacher performance and retention is stronger in the deregulated market. We also find positive associations between salary and performance, but only when teachers transfer from one charter school to another. While teacher retention is more closely tied to performance in New Orleans, this did not yield a net gain in teacher quality, because new teachers in New Orleans were of lower average quality than their peers in neighboring districts.