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Are We Spending Enough on Teachers in the U.S.?

Author

Listed:
  • Patrick Bayer
  • Peter Q. Blair
  • Kenneth Whaley

Abstract

Expenditures on teacher salaries in US public schools exceeds $200 billion annually, yet there is no existing evidence on whether this spending level is efficient. We fill this gap by developing a theoretical test for efficiency based on the causal impact of salary spending and taxes on local house prices. We empirically implement the test on a national sample of school districts from 1990-2015, using a research design that generates quasi-random variation in public school spending and taxes. We find that a tax-funded increase in salary spending would raise house prices, indicating that spending on teacher salaries is inefficiently low.

Suggested Citation

  • Patrick Bayer & Peter Q. Blair & Kenneth Whaley, 2020. "Are We Spending Enough on Teachers in the U.S.?," NBER Working Papers 28255, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:28255
    Note: CH DAE ED IO LE LS PE
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    Cited by:

    1. Gregory Gilpin & Ezra Karger & Peter Nencka, 2021. "The Returns to Public Library Investment," Working Paper Series WP-2021-06, Federal Reserve Bank of Chicago, revised 20 Jul 2021.
    2. Biasi, Barbara & Lafortune, Julien & Schönholzer, David, 2024. "What Works and for Whom? Effectiveness and Efficiency of School Capital Investments across the U.S," IZA Discussion Papers 16713, Institute of Labor Economics (IZA).
    3. Barbara Biasi & Julien Lafortune & David Schönholzer, 2024. "What Works and for Whom? Effectiveness and Efficiency of School Capital Investments across the U.S," CESifo Working Paper Series 10884, CESifo.

    More about this item

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • I22 - Health, Education, and Welfare - - Education - - - Educational Finance; Financial Aid
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality

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