Seminarium: Gianmarco Leon Ciliotta, UPF

Abstract: We exploit rich administrative data on the centralized teacher recruitment drive in Peru to quantify how school principals' hiring decisions shape the distribution of student achievement. Discretionary hiring selects slightly higher value-added teachers than test-based hiring, on average, but remains largely misaligned with the objective of maximizing student achievement. We find that these aggregate patterns hide substantial heterogeneity that we quantify using rich data on principals' ranking behavior through a flexible discrete choice model. Heterogeneity in hiring practices generates a standard deviation of 0.16-sigma in the value-added of selected teachers, indicating that discretionary hiring largely contributes to inequality in student achievement.