An examination of retirement rate patterns among California

pre-K–12 certificated educators

California Educational Research AssociationAnnual ConferenceDecember 1, 2011

Tony FongReino Makkonen

• Recent recession has impacted district budgets– California has a budget deficit of approximately $25 Billion

– California’s unemployment rate recently at 12%

– In 09/10, 174 out of 1,077 LEAs issued “qualified” or “negative” certifications regarding their financial status (EdSource 2010)

• Baby boomers reaching peak retirement ages

• Previous studies of all workers in general have found that workers are delaying retirement in response to the recession– Is this the case for educators?

Overview

• State education leaders interested in how the recent recession has impacted the rate of retirement among certificated educators in California

• Integrated Leadership Development Initiative requested this study

• California Commission on Teacher Credentialing

• Association for California School Administrators

• California Comprehensive Center

• Researchers

• County office representatives

Rationale for this Study

• Gaining a better understanding of the educator labor force will assist policy-makers in addressing workforce needs– Demographics of the workforce

– Retirement trends over time– Post-retirement employment

Rationale for this Study

1. How has the age distribution of educators changed over time?

2. How have the retirement rates of educators changed over time?

3. How are individual retirement decisions related to per-pupil state and local revenue and county-level unemployment rates?

4. How has the proportion of retirees employed again after retirement in the California public school system changed over time?

Research Questions

1. California State Teachers’ Retirement System (CalSTRS) Defined Benefit Program

• Employment, retirement, and post-retirement data for all certificated employees in California (aggregate counts)

2. California Department of Education• Annual district-level revenue data

– “Revenue limit”, “other state revenue”, and “other local revenue”

3. California Employment Development Department• Historical county-level unemployment rates

Data Sources

Three sources comprise all state and local revenue received by districts:

1.“Revenue Limit” ( 60% of district revenue)– Used for general purposes– Combination of local property taxes and state funds

2.“Other State Revenue” ( 22%)– Includes state revenue for child nutrition programs, child

development apportionments, and state lottery

3.“Other Local Revenue” ( 8%)– Includes parcel taxes, other non-ad valorem taxes, and interest

earned

A little more on the revenue data…

Age distribution of California certificated educators over time

Proportion of the workforce within specific age ranges (percent)

YearOver

50Over

60Aged

51 to 60Aged

56 to 65Aged

51 to 55Aged

61 to 651995/96 31.4 5.5 25.9 14.2 15.7 4.11996/97 31.6 5.8 25.8 14.4 15.7 4.31997/98 33.3 6.3 27.0 15.1 16.4 4.51998/99 34.2 6.6 27.6 15.7 16.6 4.8

1999/2000 35.2 7.1 28.1 16.5 16.7 5.12000/01 36.1 7.6 28.5 17.2 16.7 5.42001/02 36.9 8.0 28.8 17.8 16.7 5.62002/03 37.7 8.6 29.0 19.3 15.7 5.92003/04 38.6 9.4 29.2 20.4 15.2 6.52004/05 38.8 9.9 28.9 21.0 14.6 6.72005/06 38.8 10.2 28.5 21.5 14.0 7.02006/07 39.1 11.0 28.1 22.3 13.3 7.52007/08 39.0 12.3 26.6 22.6 12.5 8.52008/09 39.0 13.2 25.8 22.8 12.0 9.12009/10 39.6 14.2 25.4 23.4 11.8 9.8

Retirement rates of those aged 58 to 64

Results from a logistic regression examining correlates with the retirement decision

Model 1 Model 2Odds ratio Odds ratio

(standard error) (standard error)Independent variable

Per-pupil revenue limit (in thousands) 1.0089 1.0089(.0073) (.0073)

Per-pupil other state revenue (in thousands) 0.9769 0.9768(.0125) (.0124)

Per-pupil other local revenue (in thousands) 0.9606* 0.9609*(.0100) (.0101)

Prior year unemployment 1.0037(.0041)

Current year unemployment 1.0041(.0043)

n = 1,879,935*Significant at the 5 percent level.

Percentage of retirees working post-retirement in California

Conclusions

• In recent years there is a greater proportion of certificated educators who are older– May have cost implications at the local level

• The retirement rate is on an upward swing in recent years

• Educators are more likely to retire when their districts’ per-pupil other local revenues decline

• The proportion of retired educators returning to work in the California public school system has increased over the past 15 years

Possible Next Steps

• Get data on districts that have offered early retirement incentives in recent years– Which types of districts have offered them?– Which types of educators take up the offers?

• Get more detailed data on educators working post-retirement– Which subjects are they teaching?

– What types of schools are they working in?

– For how long do they return to work?

Contact Information

Tony Fongtfong@wested.org

415.615.3289