Monopsony power in the market for teachers: Why teachers should support market-based education reform

Employers can exploit individuals with high moving costs when local labor m arkets are not competitive. Along with nurses and university faculty, teach ers are sometimes in such a disadvantageous situation. Teachers' price elas ticity of supply may be quite low in many regions, and their geographic mob ility may be low when they are their household's second wage earner Their o ccupational mobility is often low because of the scarcity of alternate empl oyers within commuting distance. Nearly 96 percent of Texas' teachers work in tax-financed school districts, and many regions have only one district. An econometric model developed from school district data from 48 South Texa s and 48 North Texas counties supports the hypothesis that teachers are pai d less in less competitive labor markets. In Texas, teachers' salaries are not determined by collective bargaining between district officials and teac her unions. That relatively unique feature of Texas makes it especially wel l-suited to the task of disentangling monopsony effects from other labor ma rket forces.