|No. 2/2010: TEACHER MOBILITY
RESPONSES TO WAGE CHANGES: EVIDENCE FROM A QUASI-NATURAL EXPERIMENT.
This paper utilizes a Norwegian experiment with exogenous wage changes to study teacher’s turnover decisions. Within a completely centralized wage setting system, teachers in schools with a high degree of teacher vacancies in the past got a wage premium of about 10 percent during the period 1993-94 to 2002-03. The empirical strategy exploits that several schools switched status during the empirical period. In a fixed effects framework, the wage premium reduces the probability to quit by 6–7 percentage points and increases recruitment by 4–7 percentage points.