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The Rate of Return to Teaching: How does it Compare to other Graduate Jobs?

Author

Listed:
  • Peter Dolton

    (Centre for Economic Performance, London School of Economics., Peter.Dolton@lse.ac.uk)

  • Tsung-Ping Chung

    (Centre for Economic Performance, London School of Economics.)

Abstract

The problem of recruiting graduates into the teaching profession and retaining them has bedevilled recent UK governments. An obvious question to ask is why is teaching so relatively unattractive for graduates. This paper presents a careful analysis of this problem. We compare the earnings of qualified teachers who choose to teach with the ‘opportunity wage’ for those who do not teach. We find that the ‘rate of return on career choice’ for teachers has been declining for both men and women over the past 25 years although teaching is still relatively well paid for women. From our net present value analysis we estimate that males who enter teaching lose, on average, earnings of ©40,000 to ©67,000 over their lifetime while females could stand to gain average earnings of ©42,000 to ©65,000 if they opted to become school teachers.

Suggested Citation

  • Peter Dolton & Tsung-Ping Chung, 2004. "The Rate of Return to Teaching: How does it Compare to other Graduate Jobs?," National Institute Economic Review, National Institute of Economic and Social Research, vol. 190(1), pages 89-103, October.
    • Handle: RePEc:sae:niesru:v:190:y:2004:i:1:p:89-103
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    Citations

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    Cited by:

    1. Richard Disney & Carl Emmerson & Gemma Tetlow, 2009. "The value of teachers' pensions," IFS Working Papers W09/07, Institute for Fiscal Studies.
    2. Hof, Stefanie & Strupler Leiser, Mirjam & Wolter, Stefan C., 2011. "Career Changers in Teaching Jobs: A Case Study Based on the Swiss Vocational Education System," IZA Discussion Papers 5806, Institute of Labor Economics (IZA).
    3. Stefanie Hof & Mirjam Strupler & Stefan C. Wolter, 2011. "Quereinsteiger in den Lehrberuf am Beispiel der schweizerischen Berufsbildung," Economics of Education Working Paper Series 0059, University of Zurich, Department of Business Administration (IBW).
    4. Chen, Dandan, 2009. "The economics of teacher supply in Indonesia," Policy Research Working Paper Series 4975, The World Bank.
    5. Peter Dolton, 2004. "Recruiting High Quality Teachers," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 2(4), pages 11-20, 01.
    6. Peter Dolton, 2004. "Recruiting High Quality Teachers," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 2(04), pages 11-20, January.
    7. Peter Dolton & Li Lin, 2011. "From Grants to Loans and Fees: The Demand for Post-Compulsory Education in England and Wales from 1955 to 2008," CEE Discussion Papers 0127, Centre for the Economics of Education, LSE.
    8. Sam Sims & Asma Benhenda, 2022. "The effect of financial incentives on the retention of shortage-subject teachers: evidence from England," CEPEO Working Paper Series 22-04, UCL Centre for Education Policy and Equalising Opportunities, revised Apr 2022.
    9. Asadullah, Mohammad Niaz, 2006. "Pay differences between teachers and other occupations: Some empirical evidence from Bangladesh," Journal of Asian Economics, Elsevier, vol. 17(6), pages 1044-1065, December.
    10. repec:ces:ifodic:v:2:y:2004:i:4:p:14567719 is not listed on IDEAS

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