RT Journal Article
SR Electronic
T1 Premium or Penalty?
JF Journal of Human Resources
FD University of Wisconsin Press
SP 538
OP 577
DO 10.3368/jhr.0620-10971R1
VO 60
IS 2
A1 Saavedra, Juan Esteban
A1 Maldonado, Dario
A1 Santibañez, Lucrecia
A1 Herrera-Prada, Luis Omar
YR 2025
UL http://jhr.uwpress.org/content/60/2/538.abstract
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.