Competitive labor markets are good for labor and for customers

Reality conforming to well tested theory is always reassuring.  This time, the instance is whether competitive labor markets in education raise or lower incomes for teachers and outcomes for students.  From The Labor Market for Teachers under Different Pay Schemes by Barbara Biasi.  From the Abstract: 

Compensation of most US public school teachers is rigid and solely based on seniority. This paper studies the effects of a reform that gave school districts in Wisconsin full autonomy to redesign teacher pay schemes. Following the reform some districts switched to flexible compensation. Using the expiration of preexisting collective bargaining agreements as a source of exogenous variation in the timing of changes in pay, I show that the introduction of flexible pay raised salaries of high-quality teachers, increased teacher quality (due to the arrival of high-quality teachers from other districts and increased effort), and improved student achievement.

So yes, competitive labor markets and competition for labor raises incomes and raises quality of output.  Just as expected.

In the paper itself:

After the expiration of the CBAs, the same teacher could earn up to $68,000 in Appleton, and only between $39,000 and $43,000 in Oshkosh.

Not only is reality comport with theory but the effect size is very substantial.