Structure of Pension Plans May Warp Teacher Market, Research Says

At a time when millions of baby-boomer teachers are nearing retirement, their decisions on when to leave the classroom are guided more by the early retirement incentives built into state pension plans than by educational considerations, according to new research by a pair of economists.

Those pension formulas devised by state legislatures encourage teachers to retire in their mid-50s, while penalizing them for teaching longer than that, states an article appearing in the Winter 2008 issue of the magazine Education Next .

The research by Robert M. Costrell, an education reform and economics professor at the University of Arkansas, and Michael Podgursky, an economics professor at the University of Missouri at Columbia, calls attention to the long-lasting consequences from what they view as outdated teacher pension systems. These systems, though they vary from state to state, have a common, fundamental flaw, the researchers say: They reward teachers who stay in the same job for 20-plus years, penalize them for teaching too long, and make it difficult for teachers to...