Pension-Induced Rigidities in the Labor Market for School Leaders

Cory Koedel, Jason A. Grissom, Shawn Ni, and Michael Podgursky
Publication Date: 
January 2012

Educators in public schools in the United States are typically enrolled in defined-benefit pension plans, which penalize across-plan mobility. This paper uses administrative data from Missouri to examine how the mobility penalties affect the labor market for school leaders, and shows that pension borders greatly reduce leadership flows across schools. The most conservative estimates indicate that removing a pension border that divides two groups of schools will increase leadership flows between the groups by roughly 100 percent. The authors consider the implications of their findings for workforce quality in schools near pension borders in Missouri. The results are of general interest given that thousands of public schools operate near pension boundaries nationwide.