exploring alternatives to the single salary schedule

1. 1 Exploring Alternatives to the Single Salary Schedule Dan Goldhaber University of Washington

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5. 5 Need for New Teacher Hires Increasing student enrollment: Baby boomlet began in 1998 with baby boomers� children having children. 2% increase in births after eight year decline Class size reduction policies Aging teacher labor force Wave of retirements as teachers hired during the baby boom enrollment years approach retirement age By 2010, school districts in the U.S. will need to hire an additional 2 million teachers

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7. 7 Teacher Pay Overall From 1996-2003 there was at least a 7% erosion of teacher wages relative to college graduates and workers in general (Allegretto et al. 2004) Teacher relative wage disadvantage grew 10.4% over the 1996-2002 when compared to the 16 wages, which have the same �skill level� as teachers (Allegretto et al. 2004) Elementary and secondary teachers and teachers with technical skills face different opportunity costs (Goldhaber & Player, forthcoming) Teacher salary not the only factor that influences the attractiveness of teaching in particular schools or districts (Goldhaber & Player, forthcoming)

8. 8 Relative to Other Occupations �We�re beginning to see a slight improvement in salaries, but it�s a drop in the bucket compared with what needs to be done to hire sufficient numbers of talented teachers. . . When engineering, law, accounting and computer firms need high-quality employees, they�re willing to pay good salaries to attract the best and brightest. It shouldn�t be any different when it comes to educating our children,� Sandra Feldman, AFT President ��why should people believe the laws of supply and demand end at the schoolhouse door [?]� Bob Chase, Former NEA President

9. 9 Starting Salaries in Teaching and Selected Other Occupations in 2000 Teaching salary is annualizedTeaching salary is annualized

10. 10 What Would It Cost To Raise Teacher Salaries With To That Of Other Professionals?

11. 11 Problems with Single Salary Schedule Lack of link to productivity (no rewards for excellence) Different from the way individuals are rewarded in the broader labor market May create shortages of particular skill set Typically there is no adjustment (compensating differential) for differences in working conditions.

12. 12 Current Salary Structure Isn�t Working to Bring Most Academically Proficient Individuals Into Teaching On average, teachers have: Lower standardized test scores (Hanushek and Pace, 1995) Attend lower quality undergraduate institutions (Ballou, 1996) Require more remediation in college (U.S. Department of Education, 1996) �College graduates with high test scores are less likely to take jobs, employed teachers are less likely to stay, and former teachers with high test scores are less likely to return� (Murnane, et al, 1991)

13. 13 Individual and InstitutionalSAT Scores

14. 14 Do Quality Problems Arise from the Structure of Teacher Compensation? Single salary schedule explicitly places teachers on salary lanes based on degree and experience levels only By contrast, in the labor market as a whole: Significant (and increasing) returns to individual test scores (Murane et al., 1995) College quality (Brewer et al, 1999) Technical skills (Grogger and Eide, 1995)

15. 15 Research on Teacher Career Path & Labor Market Structures Anticipated/actual salaries influence Choice of major (Berger, 1988) and decision to seek certification (Zarkin, 1985) Salaries affect length of time in teaching (Murnane and Olsen, 1990) Those with higher opportunity costs more likely to leave Returns to college major and selectivity differ in and outside of the teacher labor market Ballou, for instance, finds, relative to bottom quality colleges: 5-10% pay premium in accounting, business administration, engineering, psychology only a 2% pay premium for education majors

16. 16 Structure Outside Education Labor market differentially rewards skills and productivity Large differences in salary by occupation Important �recent� changes under the surface Many occupations once closed off to women and minorities no longer are Returns to college quality and technical college skills (degree major) have increased There is an increasing return to graduating from a top college or university (Brewer et al, 1999) There is an increase in the gap (in entry level salaries) between education and technical majors (Grogger and Eide, 1995)

17. 17 Critiques of theSingle Salary Schedule Little link between pay and performance May enhance educational productivity No differentials based on expertise, training or job difficulty Little flexibility to place high quality teachers in difficult teaching environments Little flexibility to respond to labor market realities Throwing out of the managerial toolbox Limited ability to manage attrition and workforce demographics Loss of high quality teachers to administration and non-teaching occupations

18. 18 Alternatives in Use Knowledge and skills based pay/career ladder NBPTS: National voluntary system for certifying teachers who meet high and rigorous standards of what accomplished teachers should know and be able to do All 50 states recognize NBTPS, 30 States provide monetary incentives to NBCT�s Cincinnati: experiment Bonuses for hard-to-staff subjects and schools NY: Teachers of Tomorrow: Recruitment incentives for hard-to-staff schools and subjects, Certification Subjects for hard to staff subjects LA: Teach Louisiana First Program: Incentives to reduce the shortage of teachers certified to teach in critical shortage areas in failing and rural public schools School-based Performance Awards School-wide bonuses for overall student test score-growth NC: Student performance on end of grade and end of course tests is measured to determine if schools achieve exceptional growth. $1,500 bonus for teachers in successful school and $500 for support staff Individual Pay for Performance Awards Teachers paid for value-added student test score performance GA: Teachers receive 5 percent compensation bonus if teacher�s students taught earn a significant increase in average test scores

19. 19 Hybrid Alternative Salary Programs Teacher Advancement Program (TAP) Performance-Based Compensation- TA: Teachers are compensated differentially based on the increased demands of the positions they hold, how well they perform in those positions, the quality of their instructional performance and by their students' achievement growth Cost: $400/student (Milken Family Foundation: http://www.mff.org/tap/tap.taf?page=faqs) (Multiple Career Paths, Ongoing Applied Professional Growth, & Instructionally Focused Accountability) Participating States Arizona, South Carolina, Arkansas, Colorado, Florida, Sumter Co. Florida, Indiana, Louisiana, Minnesota Minnesota: Hybrid Program October, 2004 TAP: Reward teachers for performance Higher pay for teachers who work in tough schools (More power for schools to pick their own teachers and set budgets, easier ways for mid-career professionals to switch to teaching, alternative pathways to teacher licensure, evaluate new teacher preparation and improve coordination with local schools, & improve professional development and mentoring for new teachers)

20. 20 For more information about salary schedule legislation

21. 21 Complications with Differentiation Administrative costs Culture in education Politics/ Interest Groups (Ballou and Ballou & Podgursky) Nature of Teaching (Murnane and Cohen, Dixet) Success is hard to measure Work involves multiple goals and tasks Importance of teamwork and collegiality

22. 22 Empirical Evidence on Effectiveness of Alternatives Hatry, Geiner & Ashford: �Issues and Case Studies in Teacher Incentive Plans� 18 schools surveyed - most were not successful in implementing incentive plans. Odden & Kelley: �Paying Teachers for What They Know and Do: New and Smarter Compensation Strategies to Improve schools� School based incentive programs show small, but statistically significant impact on student achievement. Some positive findings for school-based rewards Very preliminary evidence on TAP Bottom Line: More empirical research is necessary to make conclusions about the effectiveness of salary schedule alternatives

23. 23 Conclusions: What Should Be Done? Single salary schedule binds school districts in important ways Non-teacher labor market offers relatively larger returns to technical major, GPA, and college quality There is not nearly enough empirical evidence to suggest that any particular alternative does or does not work Experimentation is worthwhile Concurrent with more research on the resulting impact of alternative compensation structures on teacher recruitment, retention, and performance