Title: The Economics of Teacher Occupational Choice in China
Description: Teachers are central to improving education quality and student learning. Yet, it is common that education systems short-pay teachers. Linking the occupational choice literature, this dissertation raises concern regarding potentially large adverse effects of holding teacher wages back from broader market levels, in terms of declining teacher aptitude and reduced student learning. Using a four-part analysis, I examine and contextualize theoretical stipulations using the case of Chinese teachers. Firstly, in Part I, I establish the causal link between teachers’ human capital level and student learning outcomes, by employing student fixed-effect models to relate differences in teachers across subjects to variations in student test scores. I find statistically significant impacts of teachers holding advanced tertiary degrees on improving student learning, at 0.033 standard deviations or adding about 1 additional month of learning over a typical 9-month academic year. Secondly, in Part II, I document relative pay gaps between teachers and comparable workers using Mincer earnings function.

Between 1988 and 2013, I find sharp shifts in the relative wage attractiveness in the teaching sector, such that teachers’ mean wage levels experienced 24 percentage-points reversal, at 11 percent below the private sector levels in 2013. Also, returns to holding advanced tertiary degrees in teaching is about 11 to 15 percent less than that of the private sector in years 2007, 2008, and 2013, while this difference was statistically indistinguishable in the pre-2007 period. Thirdly, in Part III, I estimate the probability of entry to teaching by different human capital traits, and find declining trends for more educated individuals overall. In 2007 and 2013, new labor market entrants with advanced tertiary degrees are 4.7 and 5.8 percentage-points less likely than comparable workers in older cohorts to choose teaching. Similar patterns continue to hold when I use alternative human capital and skills proxies. Fourthly, in Part IV, using a national representative panel dataset containing 211 matched teachers, I track career destinations and relate it to opportunity wages and non-pecuniary outcomes.

In general, I find that teacher turnover rates are high at about 35 percent, half of which are exits from the education sector entirely; there also exist positive associations between opportunity wage levels and turnover decisions, but there is no evidence of non-pecuniary gains from turnovers.