Teacher Pensions, Recruitment, and Retention



By 07/09/2014

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Are state pension plans a recruitment or retention incentive for teachers? It’s complicated, but many of the claims about the value of pensions don’t stand up to scrutiny:

*Pensions could theoretically have some sort of blanket effect boosting recruitment and retention across the entire teaching profession. That argument may sound reasonable, but it’s just as plausible that teachers don’t know about or fully appreciate the thousands of dollars states and districts spend on their pensions each year. Most teachers will likely never see that money anyway.

*For early- and mid-career teachers, state plans themselves assume that actually qualifying for a pension has no effect on teacher retention. In our review of state turnover assumptions, we found no state where teachers time their departures based on when they qualify for a minimum pension. If pensions were really a retention incentive for these workers, we’d see evidence of teachers hanging on just long enough to qualify for a pension. We don’t.

*Pensions do offer a retention incentive to late-career teachers. Since more experienced teachers tend to be more effective than those with less experience, we might expect that pensions themselves boost the quality of the teaching workforce. Or, alternatively, the back-loaded financial incentives in pensions could encourage some late-career teachers to continue teaching even if they’re burned out or ready to do something else. Two studies, one looking at macro-level impacts in Illinois and another looking at individual retirement decisions in Missouri, suggest the latter. In both studies, the pension plan appears to be boosting late-career teacher retention, but it doesn’t seem to benefit students.

*It’s impossible for state pension plans to act as a recruitment or retention incentive for individual public schools or districts within a state. State pension plans offer all teachers a benefit that’s distinct from all other workers. But by definition, a statewide pension plan that includes all public schools and all public school districts cannot provide any special recruitment or retention effect amongst those same schools and districts. School District A can’t distinguish itself from District B if it’s offering the same thing.

To sum up, the research on teacher pensions has been unable to find a recruitment effect, and prospective teachers rarely consider pensions as one of their top reasons for entering the profession. Researchers have found some retention effects for the small fraction of teachers who are committed to teach in one place for an entire career, but the teachers responding to this financial incentive may prefer to be doing something else instead. At best, the small boost in the retention of veteran teachers has not led to increases in student achievement.

- Chad Aldeman

Chad Aldeman is an associate partner at Bellwether Education Partners. This first appeared on teacherpensions.org




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