- Dillon Fuchsman
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Adequately saving for retirement requires both planning and knowledge about available retirement savings options. Teachers participate in a complex set of different plan designs and benefit tiers, and many do not participate in Social Security. While teachers represent a large part of the public workforce, relatively little is known regarding their knowledge about and preparation for retirement. We administered a survey to a nationally representative sample of teachers through RAND’s American Teacher Panel and asked teachers about their retirement planning and their employer-sponsored retirement plans. We find that while most teachers are taking steps to prepare for retirement, many teachers lack the basic retirement knowledge necessary to plan effectively. Teachers struggled to identify their plan type, how much they are contributing to their plans, retirement eligibility ages, and who contributes to Social Security. These results suggest that teacher retirement reform may not be disruptive for teachers and that better, simpler, and clearer information about teacher retirement plans would be beneficial.
Many states have recently made or are considering changes to their teacher retirement systems. However, little is known about how teachers value various elements of their retirement benefits versus other aspects of their jobs and compensation. To help alleviate this gap, we use a discrete choice stated preferences experiment embedded in a nationally representative survey of teachers to estimate their willingness-to-pay for various retirement plan characteristics and other non-salary job components. We find that teachers would be indifferent between a traditional pension and alternative retirement plan designs if the alternatives were paired with 2 to 3 percent salary increases. Our results indicate that experience is a significant mediator of retirement plan preferences. While more experienced teachers are willing to pay more to keep their traditional pension plans, inexperienced teachers do not have strong preferences around retirement plan type. However, teachers’ willingness-to-pay for traditional pension plans is less than their willingness-to-pay for many other elements of their compensation, including the value of retirement benefits, retirement age, salary growth, healthcare coverage, and Social Security enrollment.
Teacher turnover has adverse consequences for student achievement and imposes large financial costs for schools. Some have argued that high-stakes testing may lower teachers’ satisfaction with their jobs and could be a major contributor to teacher attrition. In this paper, we exploit changes in the tested grades and subjects in Georgia to study the effects of eliminating high-stakes testing on teacher turnover and the distribution of teachers across grades and schools. To measure the effect of testing pressures on teacher mobility choices we use a "difference-in-differences" approach, comparing changes in mobility over time in grades/subjects that discontinue testing vis-à-vis grades/subjects that are always tested. Our results show that eliminating testing did not have an impact on the likelihood of leaving teaching, changing schools within a district, or moving between districts. We only uncover small negative effects on the likelihood of grade switching. However, we do find relevant positive effects on retention of beginning teachers in the profession. In particular, the average probability of exit for teachers with 0-4 years of experience fell from 14 to 13 percentage points for teachers in grades 1 and 2 and from 14 to 11 percentage points in grades 6 and 7.