An Optimal Wage Policy Rule for the Labour Market of Teachers in England and Wales

Abstract

This paper explores the possibility of devising optimal wage policy rules for the labour market of teachers in England and Wales. Providing that the structural market model can be specified, and targets concerning each objective can be established over time, it is shown that the technique considered here offers a framework within which consistent decisions on educational goals can be taken. The analysis is concerned with the control of graduate recruitments into the teaching profession. Under the assumption that supply is wage elastic, and that alternative work opportunities also influence the level of entries, an algorithm for the determination of wages is derived. Finally, a numerical example illustrating the workings of the rule is considered.