School Finance and Teacher Pay Competitiveness

The issue of teacher pay has become a popular topic in our national political discourse over the past few years. Low salaries have been cited as a primary cause of several statewide teacher strikes and demonstrations, and the issue has even featured in the current presidential campaign.

In this research brief, we present state-by-state estimates of the gaps in wages between teachers and comparable non-teacher professionals, with particular focus on the relationship between these “teaching penalties” and state school finance systems. All estimates are from the School Finance Indicators Database, a publicly-available collection of finance data published by researchers at the Albert Shanker Institute and Rutgers Graduate School of Education.

The penalties vary widely by state, ranging from 5-10 percent in in Pennsylvania and Montana to 30-35 percent in Arizona, Oklahoma, and Colorado. The gaps are larger for veteran versus young teachers, by an average of roughly four percentage points, suggesting that the teaching penalty grows modestly with experience.

We also find that teaching penalties tend to be less severe in states that spend more on education, and in those that devote a larger share of their economic capacity to K-12 education. We close with policy recommendations, including the suggestion that any federal efforts to mitigate teaching penalties should incentivize improvement in states’ finance systems.

Download the full research brief (or view in preview window below)

Users can also freely download the full SFID database in Excel or Stata format at the School Finance Indicators Database website, which also includes user-friendly documentation of how to use the data, a "reduced" dataset for those more comfortable using smaller datasets, and customizable data visualization tools.

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