Long run effects of political consolidation
Objectives: This paper presents a model of public sector wage determination. One of the empirical implications of the model is that wages will be higher in larger political jurisdictions. Therefore consolidation of smaller jurisdictions into larger ones will result in higher wages ceTeri's paribus. This has public policy implications for proposals such as Illinois Governor Quinn's to consolidate smaller public school districts into larger ones to reduce costs. If the empirical implications of the model are correct higher salaries may partially or completely counteract administrative cost savings.
Data and Methods: Data are available from the Illinois State Board of Education on consolidations of public school districts and teacher salaries. This data will be used to examine the effect of consolidation on teacher salaries.
Results/Expected Results: Previous work on this topic has examined the immediate effect of consolidation as the salaries of teachers in a lower paid district are consolidated into a higher paid district. This paper will extend that analysis to examine the longer term effects of consolidation on salaries using data for consolidation and salaries over the last ten years in Illinois.