Expert Commentary

Raising public school teacher pay: What the research says

While bigger paychecks don’t guarantee greater job satisfaction, academic studies indicate that when teacher earnings rise, school districts and students can benefit in a range of ways.

school teacher pay raise research
(Allison Shelley/The Verbatim Agency for American Education: Images of Teachers and Students in Action)

In the lead-up to the 2020 elections, the Journalist’s Resource team is combing through the Democratic presidential candidates’ platforms and reporting what the research says about their policy proposals. We want to encourage deep coverage of these proposals — and do our part to help deter horse race journalism, which research suggests can lead to inaccurate reporting and an uninformed electorate. We’re focusing on proposals that have a reasonable chance of becoming policy, and for us that means at least 3 of the 5 top-polling candidates say they intend to tackle the issue. Here we look at what the research says about the benefits and limitations of increasing public school teacher pay.

Candidates favoring higher teacher pay

Michael Bennet*, Joe Biden, Cory Booker*, Pete Buttigieg*, Amy Klobuchar*, Bernie Sanders*, Elizabeth Warren*, Andrew Yang*

What the research says

While bigger paychecks don’t guarantee greater job satisfaction, academic studies indicate that when teacher earnings rise, public school districts and students can benefit in a range of ways. The impact seems to vary, however, according to the structure and implementation of school districts’ pay systems.

Research conducted in recent years in various parts of the country and world has helped clarify the role of teacher pay. Many of these studies have found that increased pay — whether through salary hikes, one-time bonuses, college debt-forgiveness programs or other new forms of compensation — is associated with:

  • Improved teacher retention.
  • Gains in student performance.
  • A larger percentage of high-achieving college students taking courses in education.
  • An increased likelihood of hiring teachers who earned top scores on their educator certification exams.

Key context

In 2018 and 2019, frustrated teachers in multiple states held walkouts and protests over the controversial issue of teacher pay. School districts generally pay their teachers based on longevity and education level — a system that has long drawn criticism from those who say it’s unfair to pay top-performing teachers the same salary as mediocre teachers who’ve been in the field the same amount of time and have the same type of college degree.

Attempts to differentiate pay with performance-based incentives, however, have met strong opposition from teacher union leaders, who often argue that there’s no definition of a “good” teacher and that it’s unfair to pay teachers based on student achievement because many factors outside the classroom influence learning, including children’s health and home environments. In 2019, Denver teachers were on the brink of striking for the first time in 25 years to fight the district’s performance-pay program, which offers teachers additional money for meeting goals such as completing a training course and demonstrating students have made gains in learning core academic subjects.

As policymakers and elected officials have debated the best way to compensate educators, who often use their own money to buy things they need for the classroom, average teaching salaries have fallen. When adjusted for inflation, full-time, public school teachers earned an average of $58,950 annually during the 2016-17 academic year, the most recent year for which data was available from the National Center for Education Statistics (NCES). That’s down from a national average of $61,804 in 2009-10 and $59,426 in 2015-16.

Average earnings for full-time teachers vary considerably from state to state, and even within states. Salaries are lowest in Mississippi, where educators made $42,925 in 2016-17, on average. New York paid the highest average salary — $79,637, NCES data show.

But comparing salaries by state doesn’t allow for an accurate comparison of how well teachers’ take-home pay covers their basic living expenses. Cost of living also can differ drastically from place to place. In some parts of the United States, experienced teachers are able to live within their means while in other areas, they work side jobs or commute long distances to make ends meet, a USA TODAY analysis in June 2019 determined. There are few metro areas where an entry-level teacher can afford the median rent, the news outlet reported.

Starting salaries fell below $40,000 in about 70% of the states during the 2017-18 academic year, according to the National Education Association, one of the largest teacher unions. The national average for first-year teachers: $39,249.

When comparing teacher pay across states, a team of researchers at Oklahoma State University found that differences narrowed once they adjusted salaries to take into account such things as cost of living, tax rates and teachers’ personal characteristics, including age, race and marital status. To better understand teacher pay and put it into context, it’s important to compare it against the earnings of other college-educated professionals in the same state, the researchers explain in a paper published recently in the Public Finance Review.

“The most meaningful comparison is that between the federal tax-adjusted pay of public school teachers and college-educated nonteachers,” they write, adding that state officials should monitor differences between these two employee groups over time.

Over the past year and a half, several national polls have found that a majority of the public thinks teachers are not paid what they’re worth. Nearly 60% of Americans who participated in a USA TODAY/Ipsos poll in August 2018 said teachers are not compensated fairly. An Ipsos poll conducted on behalf of NPR in April 2018 found that 1 in 4 Americans think teachers are paid fairly.

Meanwhile, a survey administered for Education Next magazine suggests Americans who have up-to-date information about how much their local teachers make are much less likely to support a higher salary.

In May 2019, a nationally representative sample of 3,046 adults answered a series of questions about education topics, including whether teacher salaries should increase, decrease or stay the same. When survey participants were informed of the average annual teacher salary in their state before they were asked whether teacher salaries should change, 56% said pay should rise. When adults were asked whether salaries should change, without being provided any salary information, 72% supported a raise, the survey found.

“The higher level of endorsement for boosting teacher salaries among the ‘uninformed’ respondents reflects the fact that most Americans believe that teachers are underpaid and earn far less than they actually do,” four researchers write in Education Next’s Winter 2020 edition. “When asked to estimate average teacher salaries in their state, respondents’ average guess came in at $41,987 — 30% less than the actual average of $59,581 among our sample of educators.”

Formative findings

Early studies of teacher pay attempted to gauge whether and how student achievement was impacted by teacher salaries and school spending more broadly. More than 30 years ago, researchers examined dozens of studies on the relationship between school expenditures and student performance but found conflicting results. They decided to analyze the data collected from 45 individual studies and synthesize the findings to determine whether the amount of money spent on education influences student test scores.

The resulting analysis, published in the Journal of Education Finance in 1986, indicates the relationship between student achievement and educational expenditures “is minimal, with the expenditures which relate directly to instruction, such as teacher salary and instructional supplies, having the most positive relationship to student achievement.”

A working paper from the National Bureau of Economic Research, released in 1999, examines teacher pay in Texas in the early and mid-1990s and concludes that the relationship between salaries and student test scores is complicated and nuanced. When scholars restricted their sample of students to those who do not switch schools, higher salaries seemed to be linked to improvements in children’s math and reading scores. The research team found the strongest effects of salary in a limited number of schools that had no teacher turnover and no teachers with two or fewer years of work experience.

The study also finds that teacher mobility, teachers moving from job to job, is more strongly impacted by the characteristics of the student body — for example, students’ academic ability and demographics — than by salaries.

In the paper, the authors call the results “perplexing,” but explain that, overall, their analysis suggests that “as currently employed, salary policies do not appear to offer much promise for improvement in student performance.”

A study published in The Review of Economics and Statistics in 2000 finds that boosting teacher wages reduces high school dropout rates. That paper focuses on national school data collected from 1969 to 1989. After adjusting for labor market factors, the researchers estimate that boosting teacher pay 10% lowers dropout rates by 3% to 4%.

The researchers note that they were able to detect changes in student achievement tied to teacher pay by analyzing changes over time. “The magnitude of the estimated effects is quite a bit larger for 1989 than for the earlier years,” they write. “Most previous studies of teacher wage effects have used data from the 1970s and early 1980s, however, and our results for those years are consistent with the failure of earlier research to find robust evidence that teacher wages matter.”

Recent research

While earlier studies provide mixed results, those conducted in more recent years help clarify the role teacher compensation plays on public school campuses.

A 2010 working paper from the National Center for the Analysis of Longitudinal Data in Education Research, a joint effort of the American Institutes for Research and scholars at multiple universities, sheds light on how schools can leverage higher salaries to attract teachers with the strongest qualifications. The study examines data from North Carolina public schools between 1995 and 2004 and finds that offering better pay improves a school’s chance of hiring teachers who earned high scores on their teacher certification exams.

A paper published in 2012 in the Economics of Education Review also suggests higher teacher pay draws stronger job candidates. The researcher looked at the test scores of individuals entering teacher education courses in Australia over a span of 15 years. He matched scores from college-entrance exams with data on teacher salaries to gauge how changes in pay affect the quality of students entering the education field.

The study finds that college students with higher test scores take teacher education courses when average teacher pay increases. “The relationship between average pay and teacher aptitude is positive and significant: a 1 percent rise in teacher pay (relative to other occupations requiring a college degree) is associated with approximately a 0.6 point rise in the average percentile rank of potential teachers,” the author writes.

Also in 2012, a case study of teacher pay raises and teacher retention in San Francisco from 2002-03 through 2010-11 was released. The study finds that public school teachers were more likely to remain in their jobs after their salaries rose. However, the author also concluded that the change was most likely the result of an economic downturn that occurred at the same time.

A researcher who looked at teacher pay and retention in Texas around the same time found different results. That paper, published in the Journal of Public Economics in 2014, analyzes teacher and student data for a whole state over a longer period — 1996 to 2012. A key takeaway: An increase in base teacher pay reduces teacher turnover, a “pay effect [that] is largest for less experienced teachers, decreases with experience, and disappears once a teacher reaches about 19 years of experience,” the author writes.

A larger study involving dozens of countries, including the U.S., attempted to more clearly demonstrate the connection between teacher ability and student achievement and between teacher ability and salary. The study, which appeared in the Fall 2019 edition of the Journal of Human Resources, relies on data from the Organization for Economic Cooperation and Development (OECD), an association of countries that assess reading and math ability among both adults and youth.

The researchers collected data from the OECD’s Programme for the International Assessment of Adult Competencies to quantify differences in teacher skills in numeracy and literacy across 31 countries. They used that information along with student scores on the math and reading sections of the Programme for International Student Assessment (PISA) to estimate the relationship between teacher cognitive skills and student achievement.

The authors explain that teacher cognitive skills and student achievement levels differ substantially across countries. But their analyses show that student test scores are higher in countries where teachers have more advanced skills.

The authors note that country-by-country differences in student PISA scores could be narrowed if countries with lower student scores had a larger share of high-skill teachers. “Our results suggest that the dispersion in average PISA scores across our 31 country sample would be reduced by roughly one-quarter if each country brought its average teacher skills up to the average in Finland, the country with the highest measured skills of teachers,” they write.

When the researchers investigated the reasons some countries have a larger share of teachers with strong math and reading skills, they found that teacher pay is a primary factor. “We find that cross-country differences in women’s access to high-skill occupations and in wage premiums paid to teachers (given their gender, work experience, and cognitive skills) are directly related to teacher cognitive skills in a country,” they write. “The estimated wage differentials for teachers are directly correlated with student outcomes across our sample countries.”

Offering teachers bonuses and other financial incentives also is associated with improved student outcomes, studies show. A 2017 review of the existing research on teacher merit pay programs finds that when teachers have participated in these programs, their students saw modest gains in test scores. That report, from scholars at the National Center on Performance Incentives at Vanderbilt University, provides a systematic analysis of 44 studies published or released between 1989 and 2016 on the impact of giving teachers additional pay for achieving certain goals.

In the studies reviewed, some of which were conducted outside the U.S., merit pay came in the form of one-time bonuses, gifts and permanent salary increases ranging from $26 to $20,000.

“In substantive terms, the effect is roughly equivalent to 4.5 additional weeks of learning,” write the authors, who also note that effects differ according to a program’s design and implementation. “Our evidence, for example, suggests that group incentives result in larger positive effects on average than incentives given to individuals.”

In late 2018, the Economics of Education Review published a study that failed to find a link between student achievement and a financial bonus offered to Washington teachers who had earned certification from the National Board for Professional Teaching Standards and agreed to work in high-poverty schools.

In Washington, all teachers with National Board certification — an honor reserved for the most accomplished educators — receive a financial bonus. At the time of this study, they also got another $5,000 a year if they took positions at schools with a high percentage of students who were eligible for free or reduced-price lunches.

The additional $5,000 helped boost teacher quality at these campuses. When the bonus was implemented in 2007, 2% of teachers working in high-poverty schools were National Board certified. By 2013, 11.3% were.

While the researchers’ analysis shows that the bonus was associated with a slight rise in student math scores and a slight dip in reading scores per year, those results were not statistically significant.

Another study published in late 2018 investigates whether short-term bonuses and college loan forgiveness programs encouraged Florida teachers to take and remain in jobs that school administrators had difficulty filling. Among the study’s key takeaways: Both seem to curb teacher attrition in difficult-to-staff areas such as special education and high school science. However, direct payments appear to be more cost effective that loan subsidies, the authors note in the Journal of Policy Analysis and Management.

“We find that relatively modest payments of $500 to $1,000 per year can reduce attrition in some high-need subjects, although in some subjects, such as special education, only payments on the order of $2,500 per year appear effective,” they explain. “A one-time bonus of $1,200 reduced teacher attrition more than loan repayments of comparable magnitude.”

A working paper the National Bureau of Economic Research released in 2019 offers new evidence that school districts will raise salaries for their most effective teachers when they no longer need to negotiate with local teacher unions — and those teachers, in turn, will increase their efforts in the classroom. For this study, the researcher determined teachers’ effectiveness based on changes in their students’ test scores.

The paper focuses on how school districts in Wisconsin responded after a landmark state law known as Act 10 took effect in 2011, limiting the influence of teacher unions and allowing districts to make major changes to their pay schedules. The author studied districts through 2015, after many had adopted “flexible pay” schedules, which allowed them to pay teachers based on their performance, and abandoned “seniority pay” schedules, which have been favored by teacher unions and compensate teachers based mostly on their years of experience.

The author learned that in a subset of Wisconsin districts, high-quality teachers left districts that maintained seniority pay to work in districts that began to use a flexible pay system. Lower-quality teachers, on the other hand, either moved to districts that kept the old salary structure or left public schools altogether. “As a result, the composition of the teaching workforce improved in FP [flexible pay] districts compared with SP [seniority pay] districts,” she writes.

In addition, the author found a moderate increase in student test scores in districts that implemented flexible pay systems — an indication, she writes, that teachers began to put forth more effort.

Further reading

A Meta-Analysis of Research on the Relationship Between Educational Expenditures and Student Achievement
T. Stephen Childs and Charol Shakeshaft. Journal of Education Finance, 1986.

The gist: The relationship between student achievement and educational expenditures “is minimal, with the expenditures which relate directly to instruction, such as teacher salary and instructional supplies, having the most positive relationship to student achievement.”

Do Higher Salaries Buy Better Teachers?
Eric A. Hanushek, John F. Kain and Steven G. Rivkin. Working paper from the National Bureau for Economic Research, 1999.

The gist: “In analyses both of teacher mobility and of student performance, teacher salaries are shown to have a modest impact. Teacher mobility is more affected by characteristics of the students (income, race, and achievement) than by salary schedules.”

Examining the Link between Teacher Wages and Student Outcomes: The Importance of Alternative Labor Market Opportunities and Non-Pecuniary Variation
Susanna Loeb and Marianne E. Page. Review of Economics and Statistics, 2000.

The gist: “Once we adjust for labor market factors, we estimate that raising teacher wages by 10% reduces high school dropout rates by 3% to 4%.”

Teacher Mobility, School Segregation, and Pay-Based Policies to Level the Playing Field
Charles T. Clotfelter, Helen F. Ladd and Jacob L. Vigdor. Report from the National Center for the Analysis of Longitudinal Data in Education Research, 2010.

The gist: “Teachers with stronger qualifications are both more responsive to the racial and socioeconomic mix of a school’s students and less responsive to salary than are their less well qualified counterparts when making decisions about remaining in their current school, moving to another school or district, or leaving the teaching profession.”

Teacher Pay and Teacher Aptitude
Andrew Leigh. Economics of Education Review, 2012.

The gist: “A 1 percent rise in the salary of a starting teacher boosts the average aptitude of students entering teacher education courses by 0.6 percentile ranks, with the effect being strongest for those at the median.”

Salary Incentives and Teacher Quality: The Effect of a District-Level Salary Increase on Teacher Retention
Heather J. Hough. Case study, 2012.

The gist: “Studying a policy in the San Francisco Unified School District, the author investigates whether teacher retention increased for those teachers targeted by salary increases. The author shows that teacher retention did increase in the time period, but that increases are most likely due to the economic downturn that occurred simultaneously.”

Does It Pay to Pay Teachers More? Evidence from Texas
Matthew D. Hendricks. Journal of Public Economics, 2014.

The gist: “I show that paying teachers more improves student achievement through higher retention rates. The results also suggest that adopting a flat salary schedule may be a cheap way to improve student performance. I find no evidence that pay effects vary by the teacher’s gender or subject taught.”

Teacher Merit Pay and Student Test Scores: A Meta-Analysis
L.D. Pham, T.D. Nguyen and M.G. Springer. Report from Vanderbilt University’s Peabody College, 2017.

The gist: “Overall, we find a modest, statistically significant positive association … between teacher merit pay programs and student test scores. In substantive terms, the effect is roughly equivalent to 4.5 additional weeks of learning.”

Do Bonuses Affect Teacher Staffing and Student Achievement in High Poverty Schools? Evidence From an Incentive for National Board Certified Teachers in Washington State
James Cowan and Dan Goldhaber. Economics of Education Review, 2018.

The gist: “We study a teacher incentive policy in Washington State that awards a financial bonus to National Board certified teachers in high poverty schools … The policy increased the proportion of board certified teachers through improved hiring, increased certification rates, and reduced turnover.”

The Impact of Incentives to Recruit and Retain Teachers in “Hard‐to‐Staff” Subjects
Li Feng and Tim R. Sass. Journal of Policy Analysis and Management, 2018.

The gist: “Our findings suggest that educational subsidies, particularly ex-post loan forgive-ness for early-career teachers, can be effective tools in promoting the retention of teachers in high-need areas.”

The Value of Smarter Teachers: International Evidence on Teacher Cognitive Skills and Student Performance
Eric A. Hanushek, Marc Piopiunik and Simon Wiederhold. The Journal of Human Resources, 2018.

The gist: “We find substantial differences in teacher cognitive skills across countries that are strongly related to student performance … Observed country variations in teacher cognitive skills are significantly related to differences in women’s access to high-skill occupations outside teaching and to salary premiums for teachers.”

Adjusting State Public School Teacher Salaries for Interstate Comparison
Dan S. Rickman, Hongbo Wang and John V. Winters. Public Finance Review, 2019.

The gist: “This is the first study to show and test that teacher salary comparisons across states should be based on a comparison of public school teacher salaries with nonteacher college graduates in the states, adjusted for differences in personal characteristics and effective federal tax rates.”

The Labor Market for Teachers Under Different Pay Schemes
Barbara Biasi. Working paper from the National Bureau of Economic Research, 2019.

The gist: “A switch away from seniority pay toward flexible pay in a subset of Wisconsin districts, following the interruption of CB [collaborative bargaining] on teachers’ salary schedules mandated by Act 10 of 2011, resulted in high-quality teachers moving to FP [flexible pay] districts and low-quality teachers either moving to SP [seniority pay] districts or leaving the public school system altogether.”

Subject experts

Barbara Biasi, assistant professor of economics, Yale School of Management.

James Cowan, researcher, Center for the Analysis of Longitudinal Data in Education Research at the American Institutes for Research.

Li Feng, Brandon Dee Roberts Excellence Assistant Professor of Economics, Texas State University.

Dan Goldhaber, director, Center for the Analysis of Longitudinal Data in Education Research at the American Institutes for Research and the Center for Education Data & Research at the University of Washington.

Eric Hanushek, Paul and Jean Hanna Senior Fellow, Hoover Institution of Stanford University.

Matthew D. Hendricks, associate professor of economics, University of Tulsa.

Marc Piopiunik, postdoctoral researcher, Ifo Institute for Economic Research at the University of Munich.

Dan Rickman, Regents Professor of Economics, Spears School of Business at Oklahoma State University.

Tim R. Sass, Distinguished University Professor in the Department of Economics, Georgia State University.

Matthew G. Springer, Robena and Walter E. Hussman Jr. Distinguished Professor of Education Reform, University of North Carolina at Chapel Hill.

Hongbo Wang, lecturer in economics, Spears School of Business at Oklahoma State University.

Simon Wiederhold, professor of macroeconomics, Catholic University Eichstätt-Ingolstad.

John V. Winters, associate professor of economics, Iowa State University.


*Dropped out of race since publication date.

Need more help covering teacher salary issues? Check out our tip sheet on covering teacher unions and our collection of research on how teacher unions affect school district spending and student achievement.

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