Teacher Unions

I did some reading and writing about education economics a while back (here, here, and here) and then I stopped.

Recently though I talked with a friend who is very interested in education in this country, and I got interested in the subject again.

I started of course with the work of Caroline Hoxby, a Harvard economics professor who I think writes wonderfully clear papers about education challenges. In many ways, she thinks like a philosopher in that she sets up problems or paradoxes posed by empirical data, and then seeks to resolve them.

In this clear paper, she looks at teacher’s unions and concludes that they are bad for students in a variety of ways, the most interesting of which is that they degrade the efficiency of school “inputs” as she calls them. In other words, $1 of new textbooks at a non-union school will increase performance more than that same dollar would at a union school.

But really I don’t have the statistical knowledge to know if Hoxby is doing amazing work or just lying with statistics. From her methods section, it seems that she is correcting a lot of flaws in past studies, though there are a variety of studies on whether unions increase or decrease the education of students.

Anyway, what is important is that she explains the problem very clearly. Unions universally increase the amount of money a school has. This is a good thing because it means more resources go to schools with unions. Yay. However, there is one more effect to consider besides total budget. One must consider where the money from the budget goes. If teachers are efficiency enhancing (and they might be) then teachers will use unionization to force the budge to be reallocated to items that either parents or administrators undervalue in the teaching environment. However, if unions are rent seeking, they will move money that is directly good for students (books, computers, science labs) to parts of the budget that are good for them, i.e., increased salaries. So, there is a real question about whether the allocation effect is negative, and if so, whether it outweighs the positive effect of having more money kicking around at the school. Hoxby concludes that it is, but not only that money in unionized school districts isn’t going to where it should, but that having unions itself degrades the effectiveness of some inputs.

So here’s an example.

A school could spend money on books or increased salaries. Pretend that book help students more than teacher salaries. If there’s a union, then more money will be available in total. The pot will be bigger. However, more of the pot in a union school will go to salaries, thus negating the advantage of more money. And finally, the effectiveness of books themselves will go down. So, one can think of books as the most important input, and the effects of unions being to increase the overall money, decrease the amount spent on books, and decreasing the effectiveness of each book.


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