Abstract:
This study examines the impact of macroeconomic shocks on the labor supply of primary and secondary school teachers in Chile. We use world copper prices as proxy for macroeconomic shocks since the Chilean economy is highly dependent on copper exports. Our results indicate that an increase in world copper prices encourages teachers to leave the teaching profession and leads to a fall in the fraction of high-quality teachers who remain employed. Our results can be explained by the improved outside options that the labor market offers following a positive macroeconomic shock.
