As public budgets have grown tighter over the past decade, states and school districts have sought ways to control the growth of spending. One increasingly common strategy employed to rein in costs is to offer experienced teachers with high salaries financial incentives to retire early. Although early retirement incentive (ERI) programs have been around since the 1970s, their popularity has spiked in the past five years, as it has during previous recessions. In 2010 alone, several large states, including New York, Michigan, and Minnesota, enacted ERI legislation. Despite the popularity of ERI programs, little is known about how inducing experienced teachers to retire early affects student achievement. The main difficulty in measuring the effect of teacher retirement on student achievement is that retirement decisions may both affect and be affected by student performance. For example, teachers may retire rather than face a lower-performing group of students. The opportunity for teachers to retire early exacerbates the measurement challenge, as early retirement programs give teachers greater flexibility in deciding when they leave teaching. To take advantage of this challenge, the authors take advantage of a natural experiment brought about by a two-year ERI program offered by Illinois in the early 1990s. This short-term program led to the retirement of 10 percent of Illinois teachers in a two-year time span. The authors compare changes in student performance in schools that were more affected by the policy because they employed more experienced teachers to changes in schools that were less affected. They find the program did not reduce test scores; likely, it increased them, with positive effects most pronounced in schools that serve a more disadvantaged student population. They also find that, while this particular program produced a net cost to taxpayers, it is likely that a carefully designed program could produce similar results at a lower cost.