PT  - JOURNAL ARTICLE
AU  - Saavedra, Juan Esteban
AU  - Maldonado, Dario
AU  - Santibañez, Lucrecia
AU  - Herrera-Prada, Luis Omar
TI  - Premium or Penalty?
AID  - 10.3368/jhr.0620-10971R1
DP  - 2025 Mar 01
TA  - Journal of Human Resources
PG  - 538--577
VI  - 60
IP  - 2
4099  - http://jhr.uwpress.org/content/60/2/538.short
4100  - http://jhr.uwpress.org/content/60/2/538.full
AB  - Countries spend education budgets primarily on teacher payroll. An unresolved debate on whether teachers earn a premium or a penalty relative to other occupations complicates teacher compensation decisions. A national screening exam in Colombia and administrative data show that teaching candidates scoring above the passing cutoff have greater annual earnings early in their tenure than those below the cutoff. Extension of regression discontinuity methods away from the cutoff indicate similarly attractive earnings premia for high-scoring applicants. Despite sizeable earnings premia, teachers hold outside jobs, and teaching does not attract top college graduates, underscoring challenges to improving education solely through teacher compensation.