Incentivizing early retirement or effectiveness?

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An eyebrow-raising study on the impact of early retirement incentives on student achievement was released this week. The working paper, by Maria Fitzpatrick and Michael Lovenheim, takes a look at the effect of an early retirement incentive offered in Illinois in the early 1990s.

Their results are somewhat counterintuitive -- they find no negative effects of the retirement of experienced teachers on student achievement and, in some cases, they find small statistically significant increases in students' test scores following the retirement of these experienced teachers. One would expect retiring teachers to be replaced by brand new teachers just entering the profession who are, on average, less effective than their more-experienced peers. Prior research has shown that the relationship between experience and effectiveness diminishes over the first few years of teaching, plateauing somewhere around year six.

It's hard to know what other influences may have played a part in student test scores. The authors attempt to control for pupil-teacher ratios and don't find significant results, but they lacked data to control for many other potential changes on a state-wide basis. They hypothesize that eligible, less productive teachers may have been more likely to take advantage of the early retirement incentive, but there's no evidence to validate that theory. 

What are the policy implications for this work? Should there be a massive wave of retirement incentives? Probably not. While districts may see savings in teacher salaries without a drop in test scores, there can be significant additional costs to the retirement system (usually borne by the state). The very real costs for recruiting, hiring and providing professional development for new teachers would eat up some of the district savings, as well.

The authors' findings are surprising, but the early retirement incentives themselves are solely the children of traditional teacher salary schedules. Instead of incentivizing more senior teachers to retire, districts should structure salary schedules to keep highly effective teachers in the classroom. Without salaries moving up in lock step with years of experience, teachers --regardless of their years in the classroom -- are paid based on their effectiveness, eliminating the incentive to shed effective, experienced teachers just to save a few bucks.