While researchers have long tried to answer questions 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 2.88.
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
