Weak Markets, Strong Teachers: Recession at Career Start and Teacher Effectiveness

How do alternative job opportunities affect teacher quality? We
provide the first causal evidence on this question by exploiting
business cycle conditions at career start as a source of exogenous
variation in the outside options of potential teachers. Unlike
prior research, we directly assess teacher quality with value-added
measures of impacts on student test scores, using administrative
data on 33,000 teachers in Florida public schools. Consistent with
a Roy model of occupational choice, teachers entering the
profession during recessions are significantly more effective in
raising student test scores. Results are supported by placebo tests
and not driven by differential attrition.