Local Labor Markets and Job Match Quality: Teachers

Abstract

This paper examines how the quality of a potential teacher’s outside option affects who chooses to teach. I use variation in state level unemployment rates as a source of plausibly exogenous variation in the outside option available to first-year teachers in the NCES-SASS. I find that higher quality workers–as measured by college selectivity–become teachers when the local labor market is weak. I also find that individuals who become teachers during times of higher local unemployment are more likely to express dissatisfaction with their jobs. Other observable demographic, educational, and certification characteristics of newly hired teachers are not affected. Teachers who enter during weaker labor markets are also no less likely to remain in teaching. Economic downturns provide a potential opportunity for schools to attract and retain higher quality workers, but job satisfaction may suffer.