Are public school teachers underpaid?

US Census Bureau

Article Highlights

  • Are public school teachers overpaid? New research says yes

    Tweet This

  • Teacher overcompensation costs taxpayers $120 billion a year

    Tweet This

  • Inflated benefits push teacher pay ahead of private market

    Tweet This

Education Secretary Arne Duncan thinks public-school teachers are “desperately underpaid” and has called for doubling teacher salaries. In a new paper co-authored with Jason Richwine of the Heritage Foundation, I look into whether teachers really are desperately underpaid, or underpaid at all. Jason and I find that the conventional wisdom is far off the truth.

At first glance, public-school teachers definitely look underpaid. According to Census data, teachers receive salaries around 20 percent lower than similarly educated private-sector workers. The Bureau of Labor Statistics says teachers’ benefits are about the same as benefits in the private sector. But both the salary and benefits figures are dubious.

Most teachers have Bachelor’s or Master’s degrees in education, and most people with education degrees are teachers. Decades of research has shown that education is a less rigorous course of study than other majors: Teachers enter college with below-average SAT scores but receive much higher GPAs than other students. It may be that a degree in education simply does not reflect the same underlying skills and knowledge as a degree in, say, history or chemistry. When we compare salaries based on objective measures of cognitive ability — such as SAT, GRE, or IQ scores — the teacher salary penalty disappears.

If salaries are about even, benefits push teacher pay ahead.--Andrew Biggs

And the real world bears this out: Contrary to teachers' insistences that they could earn more outside of teaching, we show that the typical worker who moves from the private sector into teaching receives a salary increase, while the typical teacher who leaves for the private sector receives a pay cut.

If salaries are about even, benefits push teacher pay ahead. The BLS benefits data, which most pay studies rely on, has three shortcomings: It omits the value of retiree health coverage, which is uncommon for private workers but is worth about an extra 10 percent of pay for teachers; it understates the value of teachers’ defined-benefit pensions, which pay benefits several times higher than the typical private 401(k) plan; and it ignores teachers’ time off outside the normal school year, meaning that long summer vacations aren’t counted as a benefit. When we fix these problems, teacher benefits are worth about double the average private-sector level.

Finally, public-school teachers have much greater job security, with unemployment rates about half those of private-school teachers or other comparable private occupations. Job security protects against loss of income during unemployment and, even more importantly, protects a position in which benefits are much more generous than private-sector levels.

Overall, we estimate that public-school teachers receive total compensation roughly 50 percent higher than they would likely receive in the private sector. Does this mean that all school teachers are overpaid? No. But it does mean that across-the-board pay increases are hardly warranted. What is needed is pay flexibility, to reward the best teachers and dismiss the worst.

Andrew G. Biggs is a resident scholar at AEI

Also Visit
AEIdeas Blog The American Magazine
About the Author

 

Andrew G.
Biggs

What's new on AEI

Making Ryan's tax plan smarter
image The teacher evaluation confronts the future
image How to reform the US immigration system
image Inversion hysteria
AEI on Facebook
Events Calendar
  • 01
    MON
  • 02
    TUE
  • 03
    WED
  • 04
    THU
  • 05
    FRI
Wednesday, September 03, 2014 | 9:00 a.m. – 10:30 a.m.
From anarchy to Augustus: Lessons on dealing with disorder, from Rome’s first emperor

We invite you to join us for two panel discussions on how Augustus created order from chaos 2,000 years ago, and what makes for durable domestic and international political systems in the 21st century.

Event Registration is Closed
Wednesday, September 03, 2014 | 12:00 p.m. – 1:30 p.m.
Multiple choice: Expanding opportunity through innovation in K–12 education

Please join us for a book launch event and panel discussion about how a marketplace of education options can help today's students succeed in tomorrow's economy. Attendees will receive a complimentary copy of the featured book.

Thursday, September 04, 2014 | 12:00 p.m. – 1:30 p.m.
How conservatives can save the safety net

Please join us for a luncheon event in which our panel will discuss what conservatives can learn from how liberals talk and think about the safety net and where free-market economics, federalism, and social responsibility intersect to lift people out of poverty.

No events scheduled this day.
No events scheduled this day.
No events scheduled today.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.