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In public school there has been a new contract system that is being offered to teachers,...

In public school there has been a new contract system that is being offered to teachers, they now have the choice to give up life contracts in exchange for increased pay, in this new system they get short term contracts that are renewed by employees based on performance. What asymmetric information problem can occur if only some school distrcts implement this program and others don’t. Use charts if needed

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The obvious issue with this concept is when some schools don't implement this program. There can only be benefits for implementing the program, as the schools in that district will have updated and current performance reviews of qualified teachers. On the other hand, the information asymmetry occurs when a teacher might apply for a job from a school where the district did not implement the said system, to a school which demands current performance reviews and recent contract details. There would be no proof related to information for the employers of the new school that the man is qualified and ticks all boxes to earn a high paying short term contract.

Rahul Sunny answered 2 years ago
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