LIFO 101: How ‘Last-In, First-Out’ Affects School Districts

1. What is LIFO?

An abbreviation for “last-in, first-out,” LIFO refers in education jargon to a policy of layoffs in which teachers are dismissed based primarily, though usually not exclusively¹, on years of experience. This means that teachers with the least seniority in the district are dismissed, in a slash-from-the-bottom technique, often until a budget target is met. Payroll is a district’s biggest expense. Such layoffs are distinct from individual teacher dismissals because they are not driven by poor teacher performance but by spending cuts. The practice is also referred to as “seniority-based layoffs,” “last-hired, first-fired,” “first in, last out” and “quality-blind layoffs.” Still more jargon: layoffs themselves are also sometimes called “reductions in force” or RIFs.

*For example, some states protect teachers in certain shortage subject areas – such as math, science, and special education – regardless of experience level.

2. How many states and districts use LIFO to make layoff decisions?

Ten states, including California and New York, require that layoffs be determined based partially or primarily on seniority.

Most other states allow districts to create their own layoff criteria though several states go so far as to prohibit seniority from being the main factor in layoff decisions. There is no precise count on what proportion of districts nationally use LIFO, though it is clear that many do. For example, the National Council for Teacher Quality found in 2011 that 75 out of the 100 large school districts studied used seniority as the primary determinant for layoffs. In Minnesota, where districts can negotiate with local teachers unions to include performance in layoff decisions, an analysis found that few if any districts have done so.

3. What are the main arguments for and against LIFO?

• Opponents often refer to LIFO as “quality-blind layoffs” to make the point that such a policy is indifferent to teacher effectiveness, leading to a loss of good teachers, which could harm students. Many argue that such policies disproportionately harm high-poverty schools, which are often staffed by the youngest teachers. Some also point out that LIFO will increase the number of layoffs necessary during any reduction in force, because to hit the budget target, more lower-salaried staffers must be fired. Finally, opponents claim that LIFO will deter potential teachers from entering the profession because they risk being dismissed regardless of their job performance.
• Supporters of LIFO often acknowledge that it is not a perfect system but claim it is better than alternatives. Many assert that teacher experience is a significant predictor of effectiveness so using it when decided layoffs makes sense. Others argue that teacher evaluation systems that use student test scores can’t be trusted for high-stakes decisions. Still others suggest that LIFO will encourage stability and collaboration within schools, while guarding against favoritism. Supporters often claim that experienced teachers need to be protected since they have the highest salaries, and might be fired solely to cut costs. Finally, some simply argue against layoffs altogether, saying funding should ensure that layoffs rarely if ever occur, making the LIFO controversy moot.

4. Research: How does LIFO affect student outcomes?

Research is somewhat limited on this front, but what exists suggests that LIFO is worse for student achievement than performance-based layoffs.

A study published in 2015 was one of the first of its kind to look at actual — not just simulated — layoffs. It focused on Charlotte-Mecklenburg schools in North Carolina, which conducted layoffs based on a variety of factors including both seniority and how teachers scored on evaluations by their principals. In subsequent years, the study found, student achievement in math was lower in cases when layoffs were made using factors other than teacher performance, such as seniority.

Then the researcher ran simulations, and concluded that combining two performance factors — principal evaluation and teachers’ value-added scores¹ (an estimate of a teacher’s impact on growth in student test scores)² — would be preferable to using either measure by itself or simply using seniority. Several simulations have also been done contrasting LIFO to other layoff approaches  in other school districts. A simulation of layoffs in New York City found that dismissing teachers based on value-added scores, as opposed to seniority, was better for student achievement the following year. Another simulation-based study of Washington state found similar results.  Critics said that is pretty much what would be expected from a simulated round of layoffs that relied on test scores in the first place.³

*1. In the actual layoff decisions, value-added was not considered.

2. It is important to note that value-added student achievement results are only available for about 20–25% of teachers, and this simulation does not address layoffs for the majority of educators.

3. Specifically, the argument is that of course laying off teachers using test scores will by definition result in higher test scores in subsequent years according to simple simulations. After all, if a district is dismissing teachers based on student test scores one would expect test scores to subsequently improve as a result based on crude data simulations.

5. Is LIFO particularly harmful to certain groups of students?

It depends. Research from Washington state found that black students were significantly more likely to attend a school at which a teacher had been laid off based on LIFO. Data from California determined that schools with many students of color faced more layoffs under its seniority-based layoff system. And national data shows that less-experienced teachers are more likely to work in high-poverty schools, suggesting that LIFO may disproportionately affect students in poverty. However, this may not be the case in all districts, and the policy’s effects will vary based on how it is implemented. Simulations of layoffs in New York City found no evidence of disproportionate effects of the policy on different student populations, meaning middle-class students were just as likely to lose their teachers as students from poorer backgrounds.

6. Does LIFO increase the number of teacher layoffs?

Almost inevitably, yes, because the least experienced teachers are almost always paid the least. This means that districts attempting to reduce expenses through seniority-based layoffs will have to dismiss more teachers in order to hit budgetary reduction targets. Multiplestudies confirm this. For example, one research report simulates layoffs in New York City. Reducing salary expenses by 5 percent would have required laying off 7 percent of teachers if seniority was used as the criterion, but just 5 percent of teachers if test-based measures of effectiveness were used instead.¹

1. Note that these simulations looked specifically at fourth- and fifth-grade teachers in New York City

7. What’s up with the lawsuits against LIFO?

There are currently lawsuits under way in both California and New York that challenge the constitutionality of each state’s LIFO statute.

(Disclosure: Campbell Brown, The Seventy Four’s co-founder and editor-in-chief, founded the group the Partnership for Educational Justice, that is backing the LIFO lawsuit in New York. She was not involved in the editing of these cards.)

The suit in California, known as Vergara v. California and supported by the nonprofit Students Matter, has been decided by a lower court judge but is currently on appeal. The judge ruled that LIFO — as well as the state’s teacher tenure and due process laws — violated students’ constitutional right to “equal opportunity to achieve a quality education.”

Plaintiffs in the lawsuit — nine public school students and their families — argue that the state’s LIFO law requires districts “to fire some of their best, most beloved, most effective teachers, based almost exclusively on those teachers’ lack of seniority.” The state teachers unions helped lead the charge against the lawsuit, arguing that the LIFO policy ensures “objective, fair, and transparent procedures in the event of economic layoffs.”

The lawsuit in New York, known as Wright v. New York, similarly argues that LIFO (as well as New York’s tenure and due process laws) violates the state constitution’s guarantee of a “sound, basic education” by “ensuring that effective teachers are taken out of the classroom while less effective ones remain.” New York City and state teachers unions have argued against the lawsuit. A lower court judge rejected an initial motion to dismiss the lawsuit and as of September 2015, the case is facing a new motion to dismiss based on changes to the state’s tenure and due process laws, which the defendants argue make the lawsuit obsolete.

8. Do teachers unions support LIFO?

Teachers unions generally back LIFO. In New York City, the United Federation of Teachers vigorously (and successfully) opposed attempts to change state law to replace LIFO. In Minnesota, the state teachers union has fought efforts to revise the state’s dismissal law to require that effectiveness be considered in layoffs. In California, the state teachers union opposed a lawsuit that challenged the state’s seniority-based layoff policy as well as a state law that would alter the practice.

9. Does the public support LIFO?

There have been few if any national polls of the public’s support for LIFO.¹ Polls from individual states generally indicate that most citizens believe that layoffs, when necessary, should be made based on measured performance as opposed to seniority.

A poll of California voters found the vast majority of them backed alternatives to LIFO. Fifty-three percent said that layoffs should first be made based on classroom observations; 26 percent said based on students’ progress on standardized tests. Just 8 percent backed using experience as the primary determinant for teacher layoffs.² A Minnesota poll found that about two-thirds of those surveyed said that layoffs should be determined based on performance (as measured by the state’s evaluation system), while 18 percent supported using seniority.  A 2012 survey of New York City residents found that 84 percent favored layoffs based on performance rather than seniority. Ten percent preferred seniority.

*1. A 2011 national poll from Phi Delta Kappa and Gallup reports that “Americans believe that school districts should use multiple factors to determine which teachers should be laid off first, but, of the options presented, Americans believe the principal’s evaluation of a teacher’s performance should be given the most weight.” However, there is not evidently raw polling data publicly available to further examine or confirm these results.

2. The poll, conducted by the University of Southern California and the Los Angeles Times, was sharply criticized by the state teachers union.

10. What does research say about teacher experience?

One of the primary arguments for the use of LIFO is the notion that more experienced teachers are more effective than novice teachers. This is certainly true on average: evidence consistently shows that teachers with more experience produce higher test score gains than teachers with less.

For a long while, the prevailing view among researchers has been that teachers stop improving somewhere between three and five years on the job. A handful of recent studies have challenged that conventional wisdom, however, finding that although teachers make their largest improvements in their first couple years, they continue to get better throughout their career.

Another study found that how much teachers improve over time may depend on the quality of the professional environment at their schools.

There is significant variation between studies and methodologies with some finding limited returns to experience and others finding large returns. All that said, most research finds that teachers improve the most at the beginning of their career — the key point of controversy is whether and when teachers stop improving with more experience.

Most of this research is based on how teachers affect student test scores. A few studies have looked at teachers’ effects on non-test based outcomes. For example, one study examined teachers’ influence on student attendance and found fairly large benefits to more experience. However, another study examined teachers’ impact on an array of non-cognitive outcomes — such as absences, suspensions, grades and high-school graduation — and found no improvements with experience.

Teacher effects may also differ from high-stakes assessments (tests whose outcome carries serious consequences) versus low-stakes ones. One piece of research found that teacher experience had a bigger impact on how well students scored on low-stakes tests, suggesting that high-stakes exams may not fully capture the benefits of experience. Finally, it is important to note that although it is clear that experience matters, all studies find that there is much greater variation within experience levels than between experience levels. In other words, many novice teachers are likely above average and many veterans are mediocre.

11. What questions remain unanswered about LIFO?

The longer-term effects of LIFO are generally unknown and haven’t been empirically tested. Supporters of the practice argue that it increases stability in school by preserving the jobs of teachers who will remain in the classroom (since younger teachers are more likely to leave the profession). They might also suggest that using performance measures to make firing decisions would pit teachers against each other and reduce collaboration.

Opponents argue that LIFO deters prospective educators from entering the profession, as they would do so at high risk of being dismissed, regardless of their performance. Moreover, according to skeptics, LIFO contributes to school cultures that do not value, reward, or incentivize performance. Again, none of these hypotheses has been confirmed.

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