Restricting seniority as a factor in public school district layoffs: Analyzing the impact of state legislation on graduation rates

Abstract

Following the Great Recession, employment in the U.S. local education sector fell by about 364,000. I analyze whether state legislation that prohibits or limits the use of seniority in layoff decisions has an impact on public high school graduation rates. I find that over a ten-year time span, all else held constant, such legislation on average increases the yearly growth of district graduation rates by about 0.3 percentage points. This is economically significant, as the average yearly increase in the national graduation rate from 2010–11 to 2015–16 was 1 percentage point. When states prohibit or limit using seniority to determine a layoff order, districts must utilize other considerations such as teacher quality. In states with this legislation, teachers remaining following layoffs may be more effective than when states use seniority to determine the layoff order.