RECRUITING SMARTER TEACHERS

In recent years many states have raised teacher salaries to attract mo re capable teachers. Since teacher labor markets are typically in a st ate of excess supply, success of such policies is contingent on contai ning perverse feedbacks which arise among exit decisions, vacancy rate s, and the willingness of prospective teachers to invest in occupation -specific human capital. Using SAT scores as a measure of ability, we find that an across-the-board raise produces modest improvements in th e work force at best. Indeed, under plausible parameter values, it is possible for mean ability to decline.