IDEAS home Printed from https://ideas.repec.org/a/eee/ecoedu/v31y2012i3p41-53.html
   My bibliography  Save this article

Teacher pay and teacher aptitude

Author

Listed:
  • Leigh, Andrew

Abstract

Can changes in teacher pay encourage more able individuals to enter the teaching profession? So far, studies of the impact of pay on the aptitude distribution of teachers have provided mixed evidence on the extent to which altering teacher salaries represents a feasible solution to the teacher quality problem. One possible reason is that these studies have been unable to separate labor supply effects from labor demand effects. To address this, I model the relationship between current salaries and the academic aptitude of future teachers (those entering teacher education courses). Using a unique dataset of test scores for every individual admitted into an Australian university between 1989 and 2003, I explore how interstate variation in average pay or pay dispersion affects the decision to enter teacher education courses. 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. This result is robust to instrumenting for teacher pay using uniform salary schedules for public schools. I also find some evidence that more pay dispersion in the non-teaching sector lowers the aptitude of potential teachers.

Suggested Citation

  • Leigh, Andrew, 2012. "Teacher pay and teacher aptitude," Economics of Education Review, Elsevier, vol. 31(3), pages 41-53.
    • Handle: RePEc:eee:ecoedu:v:31:y:2012:i:3:p:41-53
    DOI: 10.1016/j.econedurev.2012.02.001
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0272775712000192
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econedurev.2012.02.001?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Steven G. Rivkin & Eric A. Hanushek & John F. Kain, 2005. "Teachers, Schools, and Academic Achievement," Econometrica, Econometric Society, vol. 73(2), pages 417-458, March.
    2. Peter Dolton & Oscar D. Marcenaro-Gutierrez, 2011. "If you pay peanuts do you get monkeys? A cross-country analysis of teacher pay and pupil performance [Discrimination in the market for public school teachers]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 26(65), pages 5-55.
    3. Andrew Leigh & Chris Ryan, 2006. "How and Why has Teacher Quality Changed in Australia?," CEPR Discussion Papers 534, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    4. Flyer, Fredrick & Rosen, Sherwin, 1997. "The New Economics of Teachers and Education," Journal of Labor Economics, University of Chicago Press, vol. 15(1), pages 104-139, January.
    5. Sean P. Corcoran & William N. Evans & Robert M. Schwab, 2004. "Changing Labor-Market Opportunities for Women and the Quality of Teachers, 1957-2000," American Economic Review, American Economic Association, vol. 94(2), pages 230-235, May.
    6. Clotfelter, Charles & Glennie, Elizabeth & Ladd, Helen & Vigdor, Jacob, 2008. "Would higher salaries keep teachers in high-poverty schools? Evidence from a policy intervention in North Carolina," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 1352-1370, June.
    7. Rosen, Sherwin, 1992. "The Market for Lawyers," Journal of Law and Economics, University of Chicago Press, vol. 35(2), pages 215-246, October.
    8. Ehrenberg, Ronald G. & Brewer, Dominic J., 1994. "Do school and teacher characteristics matter? Evidence from High School and Beyond," Economics of Education Review, Elsevier, vol. 13(1), pages 1-17, March.
    9. Card, David & Krueger, Alan B, 1992. "Does School Quality Matter? Returns to Education and the Characteristics of Public Schools in the United States," Journal of Political Economy, University of Chicago Press, vol. 100(1), pages 1-40, February.
    10. Paul Frijters & Michael A. Shields & Stephen Wheatley Price, 2004. "To Teach or not to Teach? Panel Data Evidence on the Quitting Decision," Department of Economics - Working Papers Series 916, The University of Melbourne.
    11. Romina Boarini & Elke Lüdemann, 2009. "The role of teacher compensation and selected accountability policies for learning outcomes: An empirical analysis for OECD countries," OECD Journal: Economic Studies, OECD Publishing, vol. 2009(1), pages 1-20.
    12. Hanushek, Eric A., 2006. "School Resources," Handbook of the Economics of Education, in: Erik Hanushek & F. Welch (ed.), Handbook of the Economics of Education, edition 1, volume 2, chapter 14, pages 865-908, Elsevier.
    13. Erik Hanushek & F. Welch (ed.), 2006. "Handbook of the Economics of Education," Handbook of the Economics of Education, Elsevier, edition 1, volume 1, number 1, June.
    14. Figlio, David N. & Rueben, Kim S., 2001. "Tax limits and the qualifications of new teachers," Journal of Public Economics, Elsevier, vol. 80(1), pages 49-71, April.
    15. A. Zabalza, 1979. "The Determinants of Teacher Supply," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 46(1), pages 131-147.
    16. Tsung Ping Chung & Peter Dolton & Andrew Tremayne, 2004. "The Determinants Of Teacher Supply: Time Series Evidence For The UK, 1962-2001," Royal Economic Society Annual Conference 2004 66, Royal Economic Society.
    17. Dale Ballou & Michael Podgursky, 1996. "Teacher Pay and Teacher Quality," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number tptq, November.
    18. Woessmann, Ludger, 2011. "Cross-country evidence on teacher performance pay," Economics of Education Review, Elsevier, vol. 30(3), pages 404-418, June.
    19. Jaewoo Ryoo & Sherwin Rosen, 2004. "The Engineering Labor Market," Journal of Political Economy, University of Chicago Press, vol. 112(S1), pages 110-140, February.
    20. Eric A. Hanushek & John F. Kain & Steven G. Rivkin, 1999. "Do Higher Salaries Buy Better Teachers?," NBER Working Papers 7082, National Bureau of Economic Research, Inc.
    21. Susanna Loeb & Marianne E. Page, 2000. "Examining The Link Between Teacher Wages And Student Outcomes: The Importance Of Alternative Labor Market Opportunities And Non-Pecuniary Variation," The Review of Economics and Statistics, MIT Press, vol. 82(3), pages 393-408, August.
    22. Roger Koenker & Kevin F. Hallock, 2001. "Quantile Regression," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 143-156, Fall.
    23. Betts, Julian R, 1995. "Does School Quality Matter? Evidence from the National Longitudinal Survey of Youth," The Review of Economics and Statistics, MIT Press, vol. 77(2), pages 231-250, May.
    24. Charles T. Clotfelter & Helen F. Ladd & Jacob L. Vigdor, 2006. "Teacher-Student Matching and the Assessment of Teacher Effectiveness," Journal of Human Resources, University of Wisconsin Press, vol. 41(4).
    25. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 249-275.
    26. Erik Hanushek & F. Welch (ed.), 2006. "Handbook of the Economics of Education," Handbook of the Economics of Education, Elsevier, edition 1, volume 2, number 2, June.
    27. Sergio Firpo & Nicole M. Fortin & Thomas Lemieux, 2009. "Unconditional Quantile Regressions," Econometrica, Econometric Society, vol. 77(3), pages 953-973, May.
    28. Peter Dolton & Wilbert van der Klaauw, 1999. "The Turnover of Teachers: A Competing Risks Explanation," The Review of Economics and Statistics, MIT Press, vol. 81(3), pages 543-550, August.
    29. A. D. Roy, 1951. "Some Thoughts On The Distribution Of Earnings," Oxford Economic Papers, Oxford University Press, vol. 3(2), pages 135-146.
    30. Murnane, Richard J & Willett, John B & Levy, Frank, 1995. "The Growing Importance of Cognitive Skills in Wage Determination," The Review of Economics and Statistics, MIT Press, vol. 77(2), pages 251-266, May.
    31. Figlio, David N., 1997. "Teacher salaries and teacher quality," Economics Letters, Elsevier, vol. 55(2), pages 267-271, August.
    32. Marigee P. Bacolod, 2007. "Do Alternative Opportunities Matter? The Role of Female Labor Markets in the Decline of Teacher Quality," The Review of Economics and Statistics, MIT Press, vol. 89(4), pages 737-751, November.
    33. Grogger, Jeff, 1996. "School Expenditures and Post-schooling Earnings: Evidence from High School and Beyond," The Review of Economics and Statistics, MIT Press, vol. 78(4), pages 628-637, November.
    34. N/A, 2008. "Economic Overview," National Institute Economic Review, National Institute of Economic and Social Research, vol. 203(1), pages 2-3, January.
    35. Richard B. Freeman, 1976. "A Cobweb Model of the Supply and Starting Salary of New Engineers," ILR Review, Cornell University, ILR School, vol. 29(2), pages 236-248, January.
    36. Caroline M. Hoxby & Andrew Leigh, 2004. "Pulled Away or Pushed Out? Explaining the Decline of Teacher Aptitude in the United States," American Economic Review, American Economic Association, vol. 94(2), pages 236-240, May.
    37. Jonah E. Rockoff & Brian A. Jacob & Thomas J. Kane & Douglas O. Staiger, 2011. "Can You Recognize an Effective Teacher When You Recruit One?," Education Finance and Policy, MIT Press, vol. 6(1), pages 43-74, January.
    38. Dan Goldhaber, 2007. "Everyone’s Doing It, But What Does Teacher Testing Tell Us About Teacher Effectiveness?," Journal of Human Resources, University of Wisconsin Press, vol. 42(4).
    39. Jonah E. Rockoff, 2004. "The Impact of Individual Teachers on Student Achievement: Evidence from Panel Data," American Economic Review, American Economic Association, vol. 94(2), pages 247-252, May.
    40. Elizabeth Webster & Mark Wooden & Gary Marks, 2004. "Reforming the Labour Market for Australian Teachers," Melbourne Institute Working Paper Series wp2004n28, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    41. Andrew Leigh & Chris Ryan, 2008. "How and Why Has Teacher Quality Changed in Australia?," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 41(2), pages 141-159, June.
    42. Dale Ballou & Michael Podgursky, 1995. "Recruiting Smarter Teachers," Journal of Human Resources, University of Wisconsin Press, vol. 30(2), pages 326-338.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Natalie Schock & Lieny Jeon, 2021. "ECE Program Supports and Teacher-Perceived Support from Families: Are They Connected?," Social Sciences, MDPI, vol. 10(10), pages 1-22, September.
    2. Richard Cebula & Franklin Mixon & Mark Montez, 2015. "Teachers’ salaries and human capital, and their effects on academic performance: an institution-level analysis of Los Angeles County high schools," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 39(2), pages 347-356, April.
    3. Balch, Ryan & Springer, Matthew G., 2015. "Performance pay, test scores, and student learning objectives," Economics of Education Review, Elsevier, vol. 44(C), pages 114-125.
    4. Strauss, Jack, 2013. "The Economic Gains to Colorado of Amendment 66," MPRA Paper 49928, University Library of Munich, Germany.
    5. Leigh, Andrew, 2010. "Estimating teacher effectiveness from two-year changes in students' test scores," Economics of Education Review, Elsevier, vol. 29(3), pages 480-488, June.
    6. Maria Cotofan, 2019. "Learning from Praise: Evidence from a Field Experiment with Teachers," Tinbergen Institute Discussion Papers 19-082/V, Tinbergen Institute.
    7. Geraldo Andrade Da Silva Filho & Cristine Campos De Xavier Pinto & Marcel De Toledo Vieira, 2016. "Does Money Move Teachers?," Anais do XLII Encontro Nacional de Economia [Proceedings of the 42nd Brazilian Economics Meeting] 240, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    8. Willén, Alexander, 2021. "Decentralization of wage determination: Evidence from a national teacher reform," Journal of Public Economics, Elsevier, vol. 198(C).
    9. Gjefsen, Hege Marie, 2020. "Wages, teacher recruitment, and student achievement," Labour Economics, Elsevier, vol. 65(C).
    10. Quinby, Laura D. & Wettstein, Gal, 2021. "Do deferred benefit cuts for current employees increase separation?," Labour Economics, Elsevier, vol. 73(C).
    11. Cotofan, Maria, 2021. "Learning from praise: Evidence from a field experiment with teachers," Journal of Public Economics, Elsevier, vol. 204(C).
    12. Greaves, Ellen & Sibieta, Luke, 2019. "Constrained optimisation? Teacher salaries, school resources and student achievement," Economics of Education Review, Elsevier, vol. 73(C).
    13. Grönqvist, Erik & Hensvik, Lena & Thoresson, Anna, 2022. "Teacher career opportunities and school quality," Labour Economics, Elsevier, vol. 77(C).
    14. Emma García & Eunice S. Han, 2022. "Teachers’ Base Salary and Districts’ Academic Performance: Evidence From National Data," SAGE Open, , vol. 12(1), pages 21582440221, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Johnston, Andrew C., 2021. "Preferences, Selection, and the Structure of Teacher Pay," IZA Discussion Papers 14831, Institute of Labor Economics (IZA).
    2. Hatsor, Limor, 2012. "Occupational choice: Teacher quality versus teacher quantity," Labour Economics, Elsevier, vol. 19(4), pages 608-623.
    3. Grönqvist, Erik & Vlachos, Jonas, 2008. "One size fits all? The effects of teacher cognitive and non-cognitive abilities on student achievement," Working Paper Series 2008:25, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    4. Hanushek, Eric A., 2011. "The economic value of higher teacher quality," Economics of Education Review, Elsevier, vol. 30(3), pages 466-479, June.
    5. Grönqvist, Erik & Vlachos, Jonas, 2008. "One Size Fits All? The Effects of Teacher Cognitive and Non-cognitive Abilities on Student," Working Paper Series 779, Research Institute of Industrial Economics.
    6. Emma García & Eunice S. Han, 2022. "Teachers’ Base Salary and Districts’ Academic Performance: Evidence From National Data," SAGE Open, , vol. 12(1), pages 21582440221, March.
    7. Eric A. Hanushek & Marc Piopiunik & Simon Wiederhold, 2019. "The Value of Smarter Teachers: International Evidence on Teacher Cognitive Skills and Student Performance," Journal of Human Resources, University of Wisconsin Press, vol. 54(4), pages 857-899.
    8. Grönqvist, Erik & Hensvik, Lena & Thoresson, Anna, 2022. "Teacher career opportunities and school quality," Labour Economics, Elsevier, vol. 77(C).
    9. Grönqvist, Erik & Vlachos, Jonas, 2016. "One size fits all? The effects of teachers' cognitive and social abilities on student achievement," Labour Economics, Elsevier, vol. 42(C), pages 138-150.
    10. Montalbo, Adrien, 2021. "Schools without a law: Primary education in France from the Revolution to the Guizot Law," Explorations in Economic History, Elsevier, vol. 79(C).
    11. Gilpin, Gregory A., 2012. "Teacher salaries and teacher aptitude: An analysis using quantile regressions," Economics of Education Review, Elsevier, vol. 31(3), pages 15-29.
    12. Mausumi Das & Subrata Guha, 2012. "What Do Teachers Do? Teacher Quality Vis-a-vis Teacher Quantity in a Model of Public Education and Growth," Working papers 216, Centre for Development Economics, Delhi School of Economics.
    13. Adrien Montalbo, 2019. "Education and economic development. The influence of primary schooling on municipalities in nineteenth-century France," Working Papers halshs-02286126, HAL.
    14. Bernal, Pedro & Mittag, Nikolas & Qureshi, Javaeria A., 2016. "Estimating effects of school quality using multiple proxies," Labour Economics, Elsevier, vol. 39(C), pages 1-10.
    15. Eric A. Hanushek & Marc Piopiunik & Simon Wiederhold, 2014. "International Evidence on Teacher Cognitive Skills and Student Performance," CID Working Papers 63, Center for International Development at Harvard University.
    16. Hege Marie Gjefsen & Trude Gunnes, 2015. "School accountability Incentives or sorting?," Discussion Papers 815, Statistics Norway, Research Department.
    17. Patrick Walsh, 2014. "When Unified Teacher Pay Scales Meet Differential Alternative Returns," Education Finance and Policy, MIT Press, vol. 9(3), pages 304-333, July.
    18. Marine de Talancé, 2015. "Better Teachers, Better Results? Evidence from Rural Pakistan," Working Papers DT/2015/21, DIAL (Développement, Institutions et Mondialisation).
    19. Hinrichs, Peter, 2021. "What kind of teachers are schools looking for? Evidence from a randomized field experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 186(C), pages 395-411.
    20. Leigh, Andrew, 2010. "Estimating teacher effectiveness from two-year changes in students' test scores," Economics of Education Review, Elsevier, vol. 29(3), pages 480-488, June.

    More about this item

    Keywords

    Salary; Occupational choice; Teaching;
    All these keywords.

    JEL classification:

    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecoedu:v:31:y:2012:i:3:p:41-53. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/econedurev .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.