This study offers a simple two-period job matching model linking teachers unions to both voluntary and involuntary teacher turnover. The model predicts that teachers unions, by negotiating higher wages for teachers, lower the quit probability of high- ability teachers but raise the dismissal rate of underperforming teachers, as higher wages provide districts greater incentive to select better teachers. As a result, unions help the educational system reach an efficient equilibrium where high-quality teachers are matched with high wages. The unique district-teacher matched panel data for 2003-2012 enables me to use within-state and within-district variations, as well as instrumental variables, to identify union effects on teacher turnover. The data confirms that, compared to districts with weak unionism, districts with strong unionism dismiss more low-quality teachers and retain more high-quality teachers. The empirical analysis shows that this dynamic of teacher turnover in highly unionized districts raises average teacher quality and improves student achievement.
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