More teachers, smarter students? Potential side effects of the German educational expansion

In this paper, I evaluate potential side effects of the educational expansion in Germany on the learning outcomes of today's students. The educational expansion was a demand shock in the labor market of teachers, which could have thus encouraged individuals with different teaching abilities to eventually become teachers. I find that replacing a non-affected teacher with an educational expansion teacher leads to a 2 percent reduction in students' test scores. Explorative analyses suggest that these teachers are more extrinsically rather than intrinsically motivated. The results highlight that monitoring and investing in quality is important for future extensions of public institutions.