School districts are a focus of education reform efforts in the United States, but there is very little existing research about how important they are to student achievement. We fill this gap in the literature using 10 years of student-level, statewide data on fourth- and fifth-grade students in Florida and North Carolina. A variance decomposition analysis based on hierarchical linear models indicates that districts account for only a small share (1 to 2 percent) of the total variation in student achievement. Nevertheless, the differences between lower- and higher-performing districts are large enough to be of practical and policy significance, with a one standard deviation difference in district effectiveness corresponding to about 0.11 standard deviations in student achievement (about nine weeks of schooling). District performance is generally stable over time, but there are examples of districts that have shown significant increases or decreases in performance.

Since 2002, public school teachers in Florida have been permitted to choose between a defined benefit (DB) and a defined contribution (DC) retirement plan. We exploit this unique policy environment to study new teachers’ revealed preferences over pension plan structures. Roughly 30 percent of teachers hired between 2003 and 2008 selected the DC plan, despite the fact that teachers not actively deciding within six months were defaulted into the DB plan. The share choosing the DC plan was higher among teachers with advanced degrees, math and science teachers, and teachers in charter schools. It was lower among special education teachers and especially among black and Hispanic teachers. There was only a slight relationship between plan choice and teacher value added to student achievement, with teachers in the bottom value-added quartile roughly 2 percentage points less likely to choose the DC option.

We examine earnings records for more than 130,000 classroom teachers employed by Florida public schools between the 2001–2 and 2006–7 school years, roughly 35,000 of whom left the classroom during that time. A majority of those leaving the classroom remained employed by public school districts. Among teachers in grades 4–8 leaving for other industries, a 1 standard deviation increase in estimated value added to student math and reading achievement is associated with 6–8 percent higher earnings outside teaching. The relationship between effectiveness and earnings is stronger in other industries than it is for the same groups of teachers while in the classroom, suggesting that current teacher compensation systems do not fully account for the higher opportunity wages of effective teachers.