The Political Economy of Education

Chapter 18 focuses on the important issue of teacher salaries. Teacher salaries are important because, like any other workers, teachers and prospective teachers care about their compensation and how it compares to compensation offered in other professions. The issue of teacher salaries also illustrates the effect of compensation on teacher behavior – not just whether young people go into teaching, but also who decides to become a teacher, where they teach, how well they teach, and how long they choose to stay in the profession. The chapter first discusses the issue of real versus nominal wages of teachers in the United States and other developed countries over time, followed by a discussion of relative wages, or how salaries in teaching compare to salaries in comparable occupations, and how changes in relative salaries may affect the “quality” of the supply of teachers. The chapter then compares relative teacher salaries internationally. The final sections focus on the use of the uniform salary schedule and discuss the various forms of teacher incentive pay, including a review of the impact of incentive pay on student performance.