The Effect of Employment Protection on Worker Effort: Evidence from Public Schooling

Abstract

This paper studies the effect of employment protection on worker productivity and firm output in the context of a public school system. In 2004, the Chicago Public Schools (CPS) and Chicago Teachers Union (CTU) signed a new collective bargaining agreement that gave principals the flexibility to dismiss probationary teachers (defined as those with less than five years of experience) for any reason, and without the elaborate documentation and hearing process typical in many large, urban school districts. Results suggest that the policy reduced annual teacher absences by roughly 10 percent and reduced the prevalence of teachers with 15 or more annual absences by 20 percent. The effects were strongest among teachers in elementary schools and in low-achieving, predominantly African-American high schools, and among teachers with highpredicted absences. There is also evidence that the impact of the policy increased substantially after its first year.

Employment Protection and Parental Child Care

“…First, I estimate that a softer employment protection makes working parents less willing to provide paid childcare. This extends the literature on how employment protection affects workers' behavior where sickness absence has been assessed earlier (Riphahn and Thalmaier (2001), Riphahn (2004, 2005), Lindbeck et al (2006), Olsson (2009) and Jacob (2010). Second, I show that a softer employment protection in certain firms can offset a sorting effect that alters the composition of the workforce in targeted firms in such a way that average parental childcare among employees is decreased.…”

“…Skyt-Nielsen (2009) and Ekberg et al (2005) find that family policies can affect the within household distribution of parental leave by introducing economic incentives or by earmarking certain days to the father A reason for parents to be unwilling to provide childcare is that a career interruption can have a negative effect on subsequent earnings as discussed by Albrecht et al (1999). 5 See Riphahn and Thalmaier (2001), Ichino and Riphahn (2005), Lindbeck et al (2006), Olsson (2009) andJacob (2010). See also Engellandt and Riphahn (2005) for how worker effort in terms of unpaid overtime may vary with employment protection.…”

How do teachers respond to tenure?

“…Despite this extensive literature, there is little research that looks at EPL in the context of K-12 education. Jacob (2010) used the 2004 new collective bargaining agreement in Chicago Public Schools (CPS) that gave principals the flexibility to dismiss probationary teachers for any reason and found that annual teacher absences were reduced by roughly 10 percent. Goldhaber and Hansen (2010) examine the implications of using value-added models as a criterion for granting tenure to teachers.…”

Matching strategies of teachers and schools in general equilibrium

“…Some focus has also been paid to the difficulty of getting rid of particularly ineffective teachers. See Jacob (2010). Recently, a California court case ruled teacher tenure laws deprived students the right to an equitable education, guaranteed under the state Constitution.…”