Productivity and Sectoral Allocation: The Labor Market of School Principals

Abstract

An important question is whether differences in management can explain variation in productivity and whether different compensation schemes and selection policies can impact the allocation of managerial effectiveness. To investigate this, we measure the value-added of school principals and study their labor market outcomes in Chile, where a large subsidized private sector competes with public sector schools. Using large administrative data sets on student performance and school personnel, we document substantial variation across principals in their ability to improve students' learning. We show that effective principals increase the retention of young and high value-added teachers, and that principal effectiveness is recognized by the school community. A theoretical model of job offers and acceptances guides our empirical inquiry into the principals' labor market. Leveraging observational and quasi-experimental variation, we show that: (1) principals' effectiveness is more strongly associated with wages in private schools, and (2) despite relatively rigid wages, public schools can attract better principals by improving their personnel selection process.

Personnel Management and School Productivity: Evidence from India

“…The combination of independent measures of teaching practices and panel data on student learning allow us to present direct evidence on the correlation between school management quality and independent measures of school effectiveness and productivity. 7 Third, we complement the literature on school leadership where multiple papers have studied the impact of changes in principals and superintendents on school quality, and shown that school leaders "matter" (Coelli and Green;Walsh and Dotter;2020;Lavy and Boiko;2017;Munoz and Prem;2020). Yet, for the most part, this literature has not consistently measured specific practices of school leaders.…”