If Teachers are Underpaid, Why Don’t They Earn More When They Move to Other Professions?

[Note — AEI’s Jason Richwine noticed my post urging people to read the debate in Education Next over how to assess teacher compensation.  He asked if he could submit this post to address an argument raised by Mishel and Roy that he did not have the space to respond to in Ed Next.]

(Guest Post by Jason Richwine)

The fall issue of Education Next features a debate: “Are Public School Teachers Underpaid?” Andrew Biggs and I contributed an argument based on our report released last year, while Lawrence Mishel and Joydeep Roy from the Economic Policy Institute (EPI) offer a rebuttal. Unfortunately, Andrew and I had only 300 words for our subsequent rejoinder, so much of their critique went unaddressed.

One of the points we made in our original piece is that EPI’s underpaid-teacher hypothesis generates a testable prediction: If teachers are underpaid relative to their skills, teachers who leave the profession should, on average, earn more in their new jobs. Likewise, new workers coming into teaching should, on average, take a pay cut from their previous jobs.

Andrew and I showed that, if anything, the opposite is true: Individuals get an average salary increase of 8.8 percent when they enter the teaching profession and a pay cut of around 3.1 percent when they leave.

Mishel and Roy confirm our empirical finding. In fact, they add that ex-teachers typically do not become engineers or chemists—they often become “librarians, cashiers, secretaries, and clergy.”

This would seem to cast strong doubt on the underpaid-teacher hypothesis, but Mishel and Roy don’t interpret it that way. They point out that just 1 percent of teachers actually leave for a different profession each year, and those who do leave tend to be making the lowest salaries. Therefore, they argue, we can hardly make inferences about the skill level of the average teacher based on this tiny, unrepresentative fraction. They don’t explicitly say that leavers have below-average skills, but the implication is needed for their argument to make sense.

I agree that teachers who stay could be more skilled than teachers who leave, but possessing these allegedly greater skills clearly does not compel them to seek higher salaries in the private sector. That was our point. If teachers are insufficiently compensated for their skills, we would observe teachers – particularly those with greater skills – leaving for higher-paying jobs. But despite all the anecdotes, the data just don’t show that happening.

In fact, Mishel and Roy’s response to us on job switchers is something of an own-goal. They are saying that, despite their own claims about teaching being underpaid relative to other professions, just 1 percent of teachers actually leave for a different profession each year. And that 1 percent may be made up of the least-skilled teachers. So tell me again why we need to raise teacher pay across-the-board…

12 Responses to If Teachers are Underpaid, Why Don’t They Earn More When They Move to Other Professions?

  1. I suggest one look at Teaching Salaries in Arizona and Math Teachers. I doubt this generalized result applies there.

    Also look at Math Teachers in the State of Nevada (which in most cases pays more than AZ). School started either a week ago or two weeks ago in most NV districts. The state is organized into 10 school districts by counties. #1 is Clark County with 300,000 students and never enough math teachers (Las Vegas). #2 Is Washoe County and never has enough math teachers (Reno). …. Nye County has 32,000 residents and needs 2 HS math teachers ….. Humboldt has 16,000 residents and needed 3 HS math teachers (I will be accepting one of those 3 jobs soon … again school started 2 weeks ago) ……

    Looks like in AZ, and NV many math majors have decided NOT to teach …. are they all taking lower paying jobs? Hardly.

  2. Mike G says:

    Great post.

  3. […] If Teachers are Underpaid, Why Don’t They Earn More When They Move to Other Professions? (jaypgreene.com) […]

  4. Teacher Joe in LA says:

    The logic of this thesis is so faulty it could have been concocted by a Democrat (I simply can’t think of anything more insulting to say that that!). All this proves is that the authors are biased as Arne Duncan, Secretary of Education. FYI:Teachers seldom leave the profession to go to harder jobs. They don’t call it “burned-out” because of the ease of the job. I invite any of you … all of you to come walk a week in my shoes. I’ve worked 19 years as a classroom teacher and 10 years in the private sector …including 4 1/2 in radio advertising sales

    Teachers don’t deserve more because they make more when they leave teaching. They deserve more because the number of things they do at one time, and the responsibilites they have, are greater than most mid-level managers.

    Wait til you fools succeed with chaterizing the public schools and teachers have the freedom to change jobs and go to he highest bidder. Then you will see that teachers simply won’t put up with the crap we have to put with now at the cheap price you’r paying. Really, you have as much clue as Obama has re: the economy.

    • allen says:

      So it would be foolish to allow a freer market in teaching skill because then teachers would be paid closer to their actual worth, i.e. more?

      Oh Joe, you’ve managed to get just about everything wrong in your desire to maintain the status quo and posit that teachers are underpaid. That’s why your post is long on insults and short on explanations.

      In fact, one of the main reasons kids are attracted to teaching is because of the supposed security of the position. Turns out not to be nearly as true as the kids think but that’s the assumption. But it’s that assumption of job security that’s part of the reason why there’s no teacher shortage and never has been.

      But Joe, you really can’t have it both ways.

      If a freer market, i.e. charterized public school system, in teaching skill would result higher pay then why doesn’t that dynamic operate right now?

      Surely the teachers who are underpaid due to, well, what? should have their skills recognized outside the profession and have that recognition measured in their compensation. If the logic’s faulty invoking “burn out” isn’t much of an explanation since it’s really an excuse for teachers departing the profession and not an explanation.

      • Teacher Joe in LA says:

        You are accusing me of something I did not say. I AM in favor of a freeer market. I make the argument to my fellow teachers that we would be better with a freer market all the time. I regularrly see evidence of how the school districts take advantage of the unions to keep wages low.

        Neither do I wish to maintain the status quo. Where is there evidence of that? My attack was on the LACK of logic in the thesis that said teachers must not underpaid because when they take other jobs they make less money.

        The charter schools currently can pay less because they are intheir infancy. At this point their expereinced teachers are in general not that expereinced. Teachers get better and more efficient every year. (It’s the general truth behind the salary ladder. I know you don’t like that truth and will be able to give me 3 example of how its not true but IN GENERAL it is true and why it was put in place in the first place.) Round about a teacher’s 4th or 5th year they see their age/college peers reaping the benefits of longevity in the corporate world. Think: the difference in hours a public accountant puts in in their beginning years vs after 5 years. The 16 hour days are fewer. The perks better. Its at this point in teaching that teachere look around and say: “Hey why not me.” They;re making more and working less, and I’l not. Schools lose a lot of teachers at this point. When the economy was not in the crapper Schools were having difficulty keeping teahers … especially in subject that translated to corporate work faster (i.e. Math & Science) My point is that if charters want to keep thier high standards they will have to offer better salaries along the way to keep their better “master” teachers. I believe in the compeittive marketplace and believe the smart charters WILL make those offers to some and will force others to do so because they will not be competitive with those who do.

        By the way how H— did you decide that burn out is an excuse and not an explaination.

        Again, come walk in my shoes for a week, because words and logic don’t seem to be able to impress you.

  5. My concern isn’t about comparing current teachers to the salaries they make; it’s trying to set the salary so that we attract the teachers we want. A couple of years ago when researching a funding issue here in Washington (state) I came across a statistic that showed a 75 point decline in SAT scores of students entering the teaching profession over a 20-30 year period.

    This could be related to greater opportunity for highly skilled women or any number of other factors, but finding a way to get back those 75 points seems like a big deal. Typically in the free market you have to pay more to attract more skilled (or at least able to score higher on the SAT) applicants.


    • Greg Forster says:

      Caroline Hoxby’s analysis shows no relationship between greater opportunities for women and the drop in teacher quality. It did find a relationship between the drop in quality and unionization of the profession.

      This is critically related to teacher pay. Unionization requires all workers to make the same wage, driving higher performers out of the profession while retaining and even attracting lower performers. As long as all teachers must make the same wage, the profession will remain unattractive to high performers.

    • Teacher Joe in LA says:

      “As long as all teachers must make the same wage, the profession will remain unattractive to high performers.”

      I find this is fundamentally true though not universally true. I have been a high performer in every job I’ve done – marketing materials distribution at Sony Pictures, publications assistant at Merrill Lynch, radio advertising sales for 2 different radio groups, and teaching. I admit I don’t go the extra yard for my school district in part because of pay limitations but also because my district treats me like dirt. Management mistake abound and I’m held accopuntable for them.

      In radio sales I was treated like the person who brought in the money. In teaching, although we receive virtually all our funding based upon student seat time … seat time in front of me … the mid and upper managers make decisions the make my job harder and slower and less efficient year after year after year. Yet if there’s any improvement in scores they take the credit and the salary increase for it. I’m paid less than an administrative assistant for upper management yet have far more risk – the risk that any 14 year old can lie and make a claim about my behavior and threaten my job (an actual recent occurrence for me.)

      The future needs both Rep Hunter’s and Greg’s implied solutions. I support union salary scales only because Districts will abuse teachers without them. But some kind of bonus system needs to be developed that allows high performers to get higher salaries. For years I taught more kids than an inconpetent teacher making more money than I. I hated it. But it year after year the admnistration did not do the hard work to get the guy fired. They could have, but they never even gave him undatisfactory evaluations because it took time to document it. Yet that documentation is necessary because administrators are incompetent. GOD I wish all you who hate the current public school system would realize the fat and incompetence is in MANAGEMENT not at the teaching level. Rep. Hunter – yes the SAT of teachers have gone down 75 points, but you’d be suprised how well those of lesser skills do in the classroom IF they have the heart for teaching and were born with the ability to perform the art of teaching

      GREG- Please link Carol Hoxby’s study so that I can give it a crital read. There’s a lot of junk science out there on both sides … like the “study” we are discussing here.

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  7. […] If Teachers are Underpaid, Why Don’t They Earn More When They Move to Other Professions? […]

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