How Career Concerns Influence Public Workers' Effort: Evidence from the Teacher Labor Market. Working Paper 40

This study presents a generalization to the standard career concerns model and applies it to the public teacher labor market. The model predicts optimal teacher effort levels decline with both tenure at a school and experience, all things being equal. Using administrative data from North Carolina spanning 14 school years through 2008, the author finds significant changes in teacher sick leave consistent with the generalized career concerns model. By exploiting exogenous variation in career concerns in the form of principal turnover, the author shows the observed behaviors cannot be due to the endogeneity of teacher mobility decisions alone. Also examined are the effects of career concerns incentives breaking down. The author finds evidence suggestive of teacher shirking, and presents evidence on an unobservable measure of effort taken from the Schools and Staffing Survey that corroborates findings from observable teacher absence behavior. In sum, these findings show teachers exert considerable discretion over their own effort levels in response to these incentives, with important policy implications. Predictors of Teacher Absence Independent of Career Concerns is appended. (Contains 12 tables, 2 figures, and 29 footnotes.)