How does the labor market for teachers react to a ban on collective bargaining? Tennessee teachers who lost bargaining rights in 2011 are compared to colleagues in the state whose districts never negotiated within a dierences-in-dierences framework. De-unionization reduced compensation and increased the demand for teachers. Salaries grew one percentage-point less, cumulatively over five years, while employer-paid health insurance premiums grew five percentage-points less. Instead of raising wages, administrators decreased the student-teacher ratio by half a student. Meanwhile, teachers' unions lost 25 percent of pre-prohibition revenue because contracts no longer stipulate automatic payroll deduction of union dues. (Online Appendix).
How Tax Overrides Affect Teacher Employment and School Choice
I examine how local referendums to override state-legislated tax and expenditure limits affect teacher employment and student enrollment in U.S. public schools. Regression discontinuity estimates based on close votes indicate that district administrators use override revenue to decrease class size and that parents respond by enrolling their children in funded schools. Conversely, teacher compensation does not benefit substantially from relaxing the budget constraint. These results help arbitrate between a view of tax and expenditure limits where administrators protect instruction in favor of one where budget constraints restrict all activities proportionally. They also explain why tax caps are more salient in some school districts than others.
I estimate the impact of seniority pay on workers' career trajectories in the U.S. public sector. State government employees in Michigan participate in either a defined-benefit or a defined-contribution pension plan depending on their date of hire. Defined-benefit members must remain at least a decade in state government to receive any payments, whereas defined-contribution members vest immediately. Regression discontinuity estimates show that older workers were willing to remain an additional four years in government service to receive at least twice their salary at separation. Those in highly skilled occupations were 30 percentage points more likely to persist when offered deferred compensation. In contrast, younger workers did not persist to earn deferred compensation worth an additional year's salary. Governments contemplating pension reform should consider the benefits and costs of a younger workforce with less firm-specific human capital.