Are teachers overpaid?
Higher pay than private sector

Article Highlights

  • Public school teachers receive salaries about on par with private sector workers who score the same on the SAT

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  • The average teacher suffers a slight decrease in salary upon leaving the profession

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  • To those who say schools need to pay more, we say: the money is already there, but teacher quality has not risen to match it

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On January 3, The New York Times Room for Debate asked six experts for their opinion to the widely debated question, "Are teachers overpaid?" Andrew Biggs and Jason Richwine responded:

Our research has shown that public school teachers receive salaries about on par with private sector workers who score the same on the SAT and other standardized tests of cognitive skill. But fringe benefits — in particular, generous vacation time, pensions and retiree health plans — push total compensation for teachers roughly 50 percent above private sector levels.
Rather than spending even more taxpayer money inefficiently, policymakers should change how school funds are used.
Of course, formal tests like the SAT do not capture all of the skills needed to be an effective teacher, or a good worker. But if teachers are being underpaid for their noncognitive skills, like communications or organization abilities, we would expect that teachers who shifted to private sector jobs would receive a significant raise. This does not happen. The average teacher suffers a slight decrease in salary upon leaving the profession, and likely a greater reduction in fringe benefits. Simply put, the average teacher would not earn more in a private sector job.

Public school teachers already are compensated above fair market rates. To those who say schools need to pay more for recruiting purposes, we say: The extra money is already there, but teacher quality has not risen to match it. This implies a fundamental problem with how teachers are hired. Past research indicates that even large across-the-board pay increases would do little to improve teacher quality.

Rather than spending even more taxpayer money inefficiently, policymakers should change how school funds are used. Merit pay to reward the best teachers would be a good start. But merit pay must be part of fundamental reforms to help schools hire, promote and fire teachers according to the best interests of students. This kind of arrangement is standard in the private sector, where continuous quality improvement is both expected and delivered.

Ultimately, reform of teacher compensation will be most successful in school systems free of the regulatory burdens imposed by union contracts and the education bureaucracy.

Andrew Biggs is a resident scholar at AEI and Jason Richwine is a senior policy analyst at the Heritage Foundation.

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About the Author

 

Andrew G.
Biggs
  • Andrew G. Biggs is a resident scholar at the American Enterprise Institute (AEI), where he studies Social Security reform, state and local government pensions, and public sector pay and benefits.

    Before joining AEI, Biggs was the principal deputy commissioner of the Social Security Administration (SSA), where he oversaw SSA’s policy research efforts. In 2005, as an associate director of the White House National Economic Council, he worked on Social Security reform. In 2001, he joined the staff of the President's Commission to Strengthen Social Security. Biggs has been interviewed on radio and television as an expert on retirement issues and on public vs. private sector compensation. He has published widely in academic publications as well as in daily newspapers such as The New York Times, The Wall Street Journal, and The Washington Post. He has also testified before Congress on numerous occasions. In 2013, the Society of Actuaries appointed Biggs co-vice chair of a blue ribbon panel tasked with analyzing the causes of underfunding in public pension plans and how governments can securely fund plans in the future.

    Biggs holds a bachelor’s degree from Queen's University Belfast in Northern Ireland, master’s degrees from Cambridge University and the University of London, and a Ph.D. from the London School of Economics.

  • Phone: 202-862-5841
    Email: andrew.biggs@aei.org
  • Assistant Info

    Name: Kelly Funderburk
    Phone: 202-862-5920
    Email: kelly.funderburk@aei.org

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