Assessing the Compensation of Public-School Teachers

While researchers have long tried to answer
about whether teachers are under or overpaid, this study from the
Heritage Foundation and American Enterprise Institute attempts to evaluate the
total compensation of public school teachers against other private-sector
professionals. In order to make comparisons deemed to be more apples-to-apples,
researchers compared salaries and fringe benefits of public school teachers and
similarly skilled private-sector
workers (rather than all private-sector workers broadly, like most other
analyses do).  This was determined by
examining private-sector workers’ levels of education, cognitive abilities (SAT
and ACT results), and total weekly hours of work.  The paper used data ranging over time between
1960 and 2010.

Using this research
framework, the study finds that teachers are paid annually 19.3 percent less
than non-teachers of similar education attainment.  However, the researchers argue that the
levels of education attained by teachers may not provide a true signal of their
abilities as college-level education courses are arguably not as rigorous as
most other areas of concentration.  In
2009, for instance, education majors at Indiana University had an average GPA
of 3.65, while students majoring in math, science, and economics averaged

The study also points out
that on cognitive ability tests teacher scores often fall below the average of
other college graduates (evidenced by results from the SAT, ACT, and Armed
Forces Qualification Test).  After
correcting for this difference, the 19.3 percent gap in salary evaporates into
a statistically insignificant 0.6 percent premium in favor of teachers.

When looking at total
compensation packages, however, public school teachers gain ground on their
private-sector counterparts receiving benefits totaling 100.8 percent of their
salaries while private sector employees only receive benefits amounting to 43.5
percent of their salaries.  

The third factor the
report accounts for is job security. Public school teachers enjoyed
unemployment rates 1.7 percentage points lower than the non-teacher
average.  The report calculates the value
of this added job security as worth 8.6 percent of compensation, meaning a
teacher would have to be offered a raise of more than 8.6 percent to give up
some of their job security.  With this in
mind, if salaries are assumed to be relatively comparable, public school
teachers enjoy a total compensation 52 percent higher than their market value.

While these numbers are
aggregated from across the nation, Ohio ranks sixth in the
country in terms of salary “comfort” according to TeacherPortal.  While public school teachers in Ohio enjoy
starting salaries that are comparable to private sector levels in the mid-low
$30K range, many veteran teachers can earn far
more than that,
based solely on years of experience and degrees.

Nobody denies that
teachers that perform at the highest level should be compensated at a level
commensurate with their abilities – and many teachers currently aren’t.  However, in times of constrained budgets, it
has become increasingly necessary to reevaluate the way all teachers are paid.
This analysis doesn’t provide a definitive answer to the oft-asked question as
to whether teachers are under or overpaid, but it provides some useful
frameworks with which to continue exploring it.

 "Assessing the Compensation of
Public-School Teachers
Jason Richwine and Andrew G. Briggs
The Heritage Foundation in partnership with American Enterprise Institute
November 2011

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