NCPA - National Center for Policy Analysis

Teachers And Their Wages

December 1, 1999

Teachers often complain that their wages have declined over the years relative to those of other workers. There is evidence to support their contention. A recent study established that since 1940 the wages of U.S. teachers have lagged the wages of all workers by nearly 20 percentage points.

When compared with the wages of other college graduates, the relative gap is about 15 percentage points.

A new study by University of Chicago economist Darius Lakdawalla explains why. He concludes that the decline in teachers' wages has been accompanied by a fall in their relative level of schooling.

  • Comparing the schooling of teachers and other workers born around 1900 to those born around 1950, he found that teachers lost more than four years of schooling relative to the average American worker.
  • "While teacher quality has fallen," says Lakdawalla, "the quantity of teachers has grown dramatically over the past half century" -- not only in the U.S., but in many other developed countries as well.
  • The author writes, "The relative wages of schoolteachers in advanced economies have fallen just as dramatically as the demand for schooling has risen, and as the utilization of teachers has become more intense."
  • Lakdawalla theorizes that college graduates outside of teaching, such as doctors or engineers, "possess specialized knowledge whose productivity improves as a result of continual innovation" -- but teachers possess general knowledge, such as arithmetic and geography, "whose productivity remains largely the same."

Teachers suffer wage declines relative to other college graduates because their knowledge becomes relatively less productive. Furthermore, since the relative productivity of teacher quality falls, investments in teacher quantity become more attractive, he believes, which explains dramatically rising teacher-student ratios.

Source: Macroscope, "Are Teachers Underpaid?" Investor's Business Daily, November 30, 1999.


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