by Maria D. Fitzpatrick, Michael F. Lovenheim
July 07, 2014
Some states and school districts have sought ways to control high spending by offering experienced teachers with high salaries financial incentives to retire early. The aging of the nation’s teacher workforce underscores the importance of examining how Early Retirement Incentive (ERI) programs influence student learning. On the one hand, teachers near retirement tend to be the most experienced and are typically replaced with much less experienced or new teachers. On the other hand, they may put forth less effort than younger teachers or may be less well trained in modern pedagogical practices. The data suggest that ERI programs have negligible effect on student performance, with standardized test scores rising at best by 1 percent and at worst by .002 of a standard deviation. In short, early retirement incentives can provide a means for districts to save money without hurting student achievement.