This article explores the future of teacher labor markets. The authors find that teacher hiring needs will rise over the coming decade largely because of retirements. However, this increase will not be significantly different from that of past decades.Labor market ; Retirement

Daniel Aaronson

Katherine Meckel

English

Research Papers in Economics

The impact of baby boomer retirements on teacher labor markets 
by Daniel Aaronson, economic advisor and team leader of the microeconomics group, and Katherine Meckel, associate economist
This article explores the future of teacher labor markets. The authors find that teacher 
hiring needs will rise over the coming decade largely because of retirements. However, 
this increase will not be significantly different from that of past decades.
Chicagﾭo Fed Letter
ESSAYS ON ISSUES                                               THE FEDERAL RESERVE BANK                          SEPTEMBER 2008                                                   
                              OF CHICAGO                                                          NUMBER 254
1. Share of teachers aged 50 and older, 1940–2000
Note: The final bar shows the share of all college educated workers (not just teachers)  
aged 50 and older in 2000. 
Source: U.S. Census Bureau, 1940–2000, U.S. Decennial Census.
percent
1940 ’50 ’60 ’70 ’80 ’90 2000 2000
0
5
10
15
20
25
30
35
One important consequence of the on-
gﾭoingﾭ baby boom retirement is an un-
precedented loss in work experience. 
An agﾭingﾭ work force has caused partic-
ular unease in elementary and second-
ary education; some 
school districts envi-
sion repercussions 
from increases in re-
tirement, as well as 
other forms of turn-
over.1 Figﾭure 1 uses 
the 1940–2000 U.S. 
Decennial Censuses to 
plot one measure of 
expected retirement— 
the fraction of teach-
ers 50 years and over. 
That share rose from 
18% in 1980 to 31% 
in 2000. While the 
2000 level is compa-
rable to the 1960 level, 
the teacher work force 
became notably youngﾭ-
er in the 1960s and 
1970s. By contrast, it is 
quite reasonable to expect that the cur-
rent teacher agﾭe distribution will remain 
intact in the near term. Moreover, the 
teacher agﾭe distribution is more skewed 
toward older employees than the collegﾭe 
educated work force in gﾭeneral (compare 
the last two bars in figﾭure 1). 
While turnover will remain on the higﾭh 
side of historical norms partly because 
of an agﾭingﾭ teacher work force, this in 
itself is not cause for alarm. The question 
is whether an increase in future turnover 
has negﾭative implications for student 
performance. Some evidence sugﾭgﾭests 
it migﾭht, particularly in the common 
scenario where an experienced teacher 
is replaced with an inexperienced one.2 
In this Chicago Fed Letter, we discuss sev-
eral aspects of teacher labor markets in 
the comingﾭ decade. First and foremost, 
we introduce our forecast of full-time 
(defined as at least 35 hours) teacher 
hiringﾭ needs.3 Our forecast links estimates 
of demand for classrooms (or equivalently 
teachers), obtained primarily througﾭh 
U.S. Census projections of school-agﾭe 
children, with the expected supply of 
teachers returningﾭ from previous years. 
We derive the latter from estimates of 
turnover amongﾭ full-time elementary 
and secondary public school teachers, 
by agﾭe, experience, and gﾭender, usingﾭ 
the most comprehensive data source on 
the occupational structure of schools—
the U.S. Department of Education’s 
2003–04 Schools and Staffing Survey (SASS) 
and its accompanyingﾭ 2004–05 Teacher 
Follow-up Survey (TFS). 
We estimate the number of new full-time 
hires needed from 2008 througﾭh 2020 
at between 2.9 million and 5.1 million, 
with the rangﾭe encompassingﾭ reasonable 
assumptions about fertility rates, student–
teacher ratios, and turnover propensity. 
Our preferred calculations predict 
280,000 new teachers in 2008–09, but 2. New hires, full-time public school teachers, 2008–20
NoteS: New hires were estimated for 2004–07 (not shown), since actual hiring data 
for those years are not available, and then carried through 2020. The shaded region 
represents the range of estimates for hiring. See the text for further details.
thousands
2008 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 ’20
0
100
200
300
400
500
Openings created by retirements
Middle assumptions
rise to 320,000 new hires by 2020–21, or 
3.9 million for school years 2008–09 
througﾭh 2020–21. 
These estimates are of total turnover, 
regﾭardless of whether it is caused by 
retirement or not. Turnover specifically 
arisingﾭ from retirement currently makes 
up rougﾭhly 30% of annual exits, or 
95,000 teachers per year. This number 
will peak at about 100,000 in 2011 and 
then remain between 90,000 and 100,000 
througﾭh the rest of the decade.
To put these numbers in context, we 
provide rougﾭh estimates of net hiringﾭ 
over the past six decades, usingﾭ teacher 
counts from the U.S. Census, as well as 
hiringﾭ projections for the years 2010 
and 2020. We find that the number of 
teachers retiringﾭ over the decade 2010–20 
will be the largﾭest in any decade post-
World War II. But because of relatively 
slower gﾭrowth in the school-agﾭe popu-
lation gﾭoingﾭ forward, the total number 
of new hires needed for all reasons is not 
far from historical norms. And, in fact, 
normalized by the size of the agﾭgﾭregﾭate 
labor force (i.e., one rougﾭh measure 
of the potential teacher work force), 
the number of new hires in the comingﾭ 
decade will be similar in magﾭnitude to 
the number of new hires needed in some 
past decades. Therefore, we would not 
expect the increase in forthcomingﾭ 
retirements to have an impact much 
beyond the variation 
in teacher hiringﾭ 
needed in the past.4 
Demand for teachers
To compute future 
demand for teachers, 
we use U.S. Census 
projections of the five-
year-old population, 
estimates of the pro-
pensity to attend 
public school kinder-
gﾭarten, and estimated 
gﾭrade progﾭression 
rates to project the 
population of stu-
dents througﾭh 2020. 
We then apply a pro-
jected student–teacher 
ratio to gﾭet the total 
number of teachers 
needed to accommodate these students.
We begﾭin with a baseline of the most re-
cent count of students, broken down by 
gﾭrade, compiled by the U.S. Department 
of Education for the 2003–04 school year. 
Each of these students is assumed to 
progﾭress througﾭh the public school sys-
tem based on estimated gﾭrade-specific 
progﾭression rates for the school years 
1999–2000 througﾭh 2002–03. For exam-
ple, we assume, based on recent patterns, 
that for every 1,000 seventh gﾭrade public 
school students, there will be 997 eigﾭhth 
gﾭrade public school students the follow-
ingﾭ year. Cohorts are followed througﾭh 
twelfth gﾭrade, while new cohorts are 
added each year to kindergﾭarten, based 
on U.S. Census projections of five year 
olds correspondingﾭ to that school year. 
To gﾭet a final count of classrooms, we 
apply student–teacher ratios to our stu-
dent totals in each year based on forecasts 
from the U.S. Department of Education’s 
National Center for Education Statistics 
(NCES). We provide some perspective on 
the uncertainty of our forecasts by allow-
ingﾭ for a rangﾭe of plausible assumptions 
about future student–teacher ratios 
and five-year-old population gﾭrowth. 
Supply of teachers
The latest detailed accountingﾭ of the 
teacher work force is available from the 
2003–04 SASS, a survey that was desigﾭned 
to emphasize, amongﾭ other thingﾭs, the 
potential for teacher shortagﾭes. 
That survey tells us there were just under 
3 million full-time public school teachers 
duringﾭ the 2003–04 school year. Of 
these, 7.6% had left the teacher work 
force by 2004–05, a turnover rate that 
has risen noticeably over the last 15–20 
years as teacher retirements have become 
more prevalent. We isolate three char-
acteristics that influence turnover—agﾭe, 
work experience, and gﾭender—in order 
to predict how many teachers will remain 
the followingﾭ year. After replacingﾭ the 
exitingﾭ teachers in our simulations with 
new teachers (i.e., those who did not 
teach in a public school in the previous 
year), we redo the turnover simulation 
for the followingﾭ year, and so forth, to 
gﾭenerate teacher supply througﾭh 2020. 
We can ascertain the importance of 
teacher retirement in two ways. First, 
the follow-up survey asks why teachers 
exit the profession. Retirement is listed 
in rougﾭhly 32% of cases in 2003–04. 
Second, we can look at agﾭe-specific ex-
its from the teachingﾭ profession. Turn-
over rises by 2.2% per year after agﾭe 50, 
with overall turnover rates hittingﾭ close 
to 30% shortly after agﾭe 60. Note that 
turnover is also higﾭh amongﾭ youngﾭ and 
inexperienced teachers.5 Because we 
typically exchangﾭe exitingﾭ teachers 
with these higﾭh-turnover replacements, 
retirements further amplify net hiringﾭ 
needs by temporarily introducingﾭ higﾭh-
turnover employees into the system. 
Net hiring 
Lastly, for each year, we equate teacher 
supply to demand. After turnover has 
been factored in, the additional number 
of teachers needed to fill this gﾭap is what 
we call net hiringﾭ. 
To be clear, our estimates are based on 
a mechanical model of teacher labor 
markets that assumes some key factors 
related to the propensity to enter and 
exit the teachingﾭ profession are similar 
to those in the recent past. These include 
compensation, pension packagﾭes, certifi-
cation requirements, tenure decisions, 
and variability in the business cycle. 
Difficulty in hiringﾭ or retainingﾭ teachers 
could lead local communities to changﾭe Charles L. Evans, President; Daniel G. Sullivan,  
Senior Vice President and Director of Research; Dougﾭlas 
Evanoff, Vice President, financial studies; Jonas Fisher, 
Economic Advisor and Team Leader, macroeconomic  
policy research; Richard Porter, Vice President, payment 
studies; Daniel Aaronson, Economic Advisor and 
Team Leader, microeconomic policy research; William 
Testa, Vice President, regional programs, and Economics 
Editor; Helen O’D. Koshy, Kathryn Moran, and 
Han Y. Choi, Editors; Rita Molloy and Julia Baker, 
Production Editors.  
Chicago Fed Letter is published monthly by the  
Research Department of the Federal Reserve 
Bank of Chicagﾭo. The views expressed are the  
authors’ and are not necessarily those of the  
Federal Reserve Bank of Chicagﾭo or the Federal 
Reserve System. 
© 2008 Federal Reserve Bank of Chicagﾭo  
Chicago Fed Letter articles may be reproduced in 
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Prior written permission must be obtained for 
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on the Bank’s website at www.chicagﾭofed.orgﾭ.
  
ISSN 0895-0164
3. New hires, full-time public school teachers, 1940–2020
NoteS: Dashed lines indicate forecasts. LHS means left-hand scale.  
RHS means right-hand scale. See the text for the definition of new hires.
SourceS: Authors’ calculations based on data from the University of Minnesota, 
Minnesota Population Center, Integrated Public Use Microdata Series; and 
Mitra Toossi, 2006, “A new look at long-term labor force projections to 2050,” 
Monthly Labor Review, Vol. 129, No. 11, November, pp. 19–39.
thousands
1950 ’60 ’70 ’80 ’90 2000 ’10 ’20
0
200
400
600
800
1,000
1,200
0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
New hires as a percentage of 
labor force aged 25–54 (RHS)
Total new hires (LHS)
percent
policies in a way that influences the supply 
of available teachers. We abstract from 
those important considerations here.
That said, figﾭure 2 provides several esti-
mates of new full-time hires througﾭh 
2020. First, the solid black line, labeled 
“middle assumptions,” is based on our 
best estimate of future teacher turnover 
rates. In this scenario, rougﾭhly 280,000 
new hires are added in 2008–09, or 
rougﾭhly 9.3% of the projected 3 million 
teacher work force. For the comingﾭ de-
cade, the total number of new hires 
needed to fill gﾭrowth in demand, as well 
as replace exitingﾭ teachers, rises by 
rougﾭhly 3,000 per year, hittingﾭ 316,000 
new hires by 2020. For 2008–20, net new 
hiringﾭ totals 3.9 million.
The shaded regﾭion provides alternative 
estimates, with plausible upper and lower 
bounds of hiringﾭ when we adjust three 
key factors: the U.S. Census’s assumed 
fertility rate, the estimated teacher turn-
over rate, and the estimated student–
teacher ratio. The fertility and turnover 
rates are allowed to vary by plus or minus 
1 percentagﾭe point from our estimated 
rates, with this rangﾭe determined by the 
U.S. Census’s higﾭh and low population 
projections and various estimates of 
teacher turnover. The 
bounds on the stu-
dent–teacher ratio are 
based on NCES pro-
jections (upper 
bound) and a constant 
ratio (lower bound). 
These adjustments 
broaden the rangﾭe of 
plausible net hiringﾭ to 
between 2.9 million 
and 5.1 million over 
the period 2008–20.
The blue line shows the 
number of new hires 
directly due to retire-
ments each year. We 
find that rougﾭhly 30% 
of the new hires needed 
duringﾭ 2008–20 are 
due to openingﾭs creat-
ed by retirements.
Are these numbers 
historically high?
Of course, there are always retire-
ments. The key question is how much 
unusual hiringﾭ would be needed to 
deal with the baby boomers’ retirements. 
Retirements rise from about 76,000 in 
2003–04 to nearly 95,000 in 2008–09, 
and averagﾭe 90,000 to 100,000 per year 
over the next decade. 
We can put our forecasts in some histor-
ical context by comparingﾭ our estimates 
with past changﾭes in full-time public 
school net hiringﾭ from the U.S. Census. 
Because of data limitations, we provide 
very rougﾭh approximations of hiringﾭ 
duringﾭ a decade by addingﾭ gﾭrowth in 
the full-time public school teacher labor 
force to the number of teachers who 
retire. The idea behind this calculation, 
which clearly understates year-to-year 
hiringﾭ, is that it consistently measures 
all well-observed hires that fill newly 
created positions and replace retirees. 
The number of retirees is conservatively 
estimated as those who are at least agﾭe 
55 at the begﾭinningﾭ of the decade (and 
thus retire by 65). “New hires” are plot-
ted in figﾭure 3. We make comparable 
projections for 2010 and 2020; they 
vary from our more detailed projections 
reported previously but are consistent 
with the historical data.
In figﾭure 3, the black line agﾭain shows 
the rise in new hires in the comingﾭ decade. 
But it also shows that the 1970s was a 
time when hiringﾭ was brisk. The reasons, 
of course, differ. In the 1970s, 72% of 
our new hire measure is from expansion 
in the teacher work force, necessitated 
by gﾭrowingﾭ populations of school-agﾭe 
children. By contrast, duringﾭ the years 
2010–20, we expect that only about 31% 
of this measure of new hires will be due 
to teacher labor force expansion, and the 
remainder will be due to retirements. 
We recogﾭnize that comparingﾭ absolute 
numbers is misleadingﾭ because the size 
of the agﾭgﾭregﾭate population—and con-
sequently the potential and actual teacher 
work pool—has gﾭrown over time. There-
fore, we normalize our new hire numbers 
by the population agﾭed 25–54 (blue 
line). Here, we find that this ratio is 
not unusually higﾭh rigﾭht now, nor do 
we expect it to become unusually higﾭh 
over the next decade.6 
Conclusion
We find teacher hiringﾭ needs will rise 
over the comingﾭ decade, and a gﾭood 
portion of this will be due to retirements. 
That said, we do not expect this increase 
will be sigﾭnificantly different from that 
of some past decades, especially relative 1 See, e.gﾭ., Sam Dillon, 2007, “Schools 
scramble for teachers because of 
spreadingﾭ turnover,” New York Times, 
Augﾭust 27.
2 Most studies find the experience effect 
disappears after a few years of teachingﾭ, 
however. See Daniel Aaronson, Lisa 
Barrow, and William Sander, 2007, 
“Teachers and student achievement in the 
Chicagﾭo public higﾭh schools,” Journal of 
Labor Economics, Vol. 25, No. 1, pp. 95–
135, and Steven Rivkin, Eric Hanushek, 
and John Kain, 2005, “Teachers, 
schools, and academic achievement,” 
Econometrica, Vol. 73, No. 2, pp. 417–458. 
3  The results are similar if we account for 
part-time teachers.
4 A workingﾭ paper that provides more 
details on the calculations reported here 
will be available soon; contact Daniel 
Aaronson at daaronson@frbchi.orgﾭ.
5 Turnover is 9% for those under agﾭe 30 
and 20% for teachers with no full-time 
teachingﾭ experience.
6 Full-time public school hires as a percent-
agﾭe of the population agﾭed 25–54 are 
expected to averagﾭe 0.91% in 2010 and 
2020, just above the 0.83% averagﾭe 
between 1960 and 2000 (and below the 
0.96% and 1.20% levels reached in 
1970 and 1980, respectively). 
7 Schools with a sigﾭnificant share of at-risk 
students migﾭht be of particular concern. 
We find some evidence that a dispropor-
tionate percentagﾭe of the future hiringﾭ 
needs will be in these schools. Althougﾭh 
the teacher agﾭe distribution in such 
schools duplicates the distributions in 
other schools, turnover is one-third 
higﾭher in gﾭeneral and 40% higﾭher for 
newly hired teachers. As retirees are re-
placed by new teachers, these schools’ 
higﾭher turnover rates will exacerbate 
their already elevated hiringﾭ needs.
to the size of the agﾭgﾭregﾭate labor force. 
However, this will play out over a longﾭer 
horizon than it has in the past, and it un-
doubtedly will not be equally dispersed 
across the nation. In particular, there 
should be more research into which 
communities migﾭht be most in need, 
especially if the burden falls on schools 
that traditionally have had the most diffi-
culty recruitingﾭ and retainingﾭ teachers.7

The impact of baby boomer retirements on teacher labor markets

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