Abstract
ABSTRACT In this study, we test how the level of relative teacher wages affects educational outcomes. Russia provides a unique setting for testing this relationship given its high regional heterogeneity. We use two measures of educational outcomes at different levels of the school system. Our results show that the level of relative teacher wages has a significant positive effect on both test scores. Institutional reforms in teacher wage setting in Russia further allow us to estimate an instrumental variable model and difference-in-difference model, which confirm the robustness of our main result. We also provide some evidence on the possible channels of this effect.
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