Early Teacher Retirement Program Does Not Adversely Affect Student Achievement



By 05/20/2014

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SUMMER 2014 / VOL. 14, NO. 1

Contact:
Maria D. Fitzpatrick: mdf98@cornell.edu, Cornell University
Ashley Inman: ashley_inman@hks.harvard.edu, 707 332-1184, Education Next Communications Office

Early Teacher Retirement Program Does Not Adversely Affect Student Achievement

Program costly, but in low-income schools small learning gains observed

Early retirement programs have been around since the 1970s, exploding in popularity within the past ten years. In 2010, more than one-third of teachers were over the age of 50, and in the coming decade, we can expect a large number of teachers to be thinking about retirement. The aging of the nation’s teacher workforce underscores the importance of studying the impact of early retirement incentive programs on student learning.

Authors of a new Education Next article analyze whether teacher retirements reduce student achievement. They found that early retirement programs did not reduce test scores, and that instead, small, positive effects were observed in schools that serve more disadvantaged student populations. They also found that the particular Illinois early retirement program they studied resulted in a net cost to taxpayers through higher pension payments. “Cost benefit estimates,” say the authors, “show that taxpayers paid 51 dollars per student for an experienced teacher to retire in return for an increase in test scores of 1 percent of a standard deviation – a negligible amount.”

To determine the effect of teacher exits on students, Maria Fitzpatrick and Michael Lovenheim, both of Cornell University, took advantage of a natural experiment – a two-year early retirement program in Illinois in the early 1990s. They compared changes in student performance in schools that had more experienced teachers who retired to changes in schools that had fewer experienced teachers.

Given that the median retiring teacher had 27 years of experience and was replaced by a teacher with less than three years of experience, the fact that these retirements had little effect on student achievement is puzzling. The authors surmise that “It could be that less-effective teachers are more likely to take advantage of early retirement opportunities, causing test scores to rise as these teachers are replaced with newer ones.”

Because of the early retirement program, the median teacher retired five years earlier than she would have otherwise, at age 55 with 27 years of service rather than at age 60 with 32 years of service. The net cost to the pension system was $80,352 per retiree, or $642.8 million to the pension system against net benefits of approximately $92.3. In other words, while an early retirement program reduces teacher salary costs, it still can cost the state money through higher pension payments.

Read “Early Retirement Payoff: Incentive programs for veteran teachers may boost student achievement” online at http://educationnext.org and available in the Summer issue of Education Next.

About the Authors
Maria D. Fitzpatrick is visiting scholar at the National Bureau of Economic Research and assistant professor of policy analysis and management at Cornell University, where Michael F. Lovenheim is associate professor of policy analysis and management. Authors are available for interviews.

About Education Next
Education Next is a scholarly journal published by the Hoover Institution that is committed to careful examination of evidence relating to school reform. Other sponsoring institutions are the Program on Education Policy and Governance at Harvard University, part of the Taubman Center for State and Local Government at the Harvard Kennedy School, and the Thomas B. Fordham Foundation. For more information about Education Next, please visit: http://educationnext.org.




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