Collective bargaining and the determinants of teachers’ salaries

Abstract

Using a national sample of public high schools, we find that bargaining spillovers play an important role in teachers’ labor markets. The spillover variable consistently indicates a larger bargaining effect than does the collective bargaining coverage dummy. We estimate that a 10 percent increase in the state density of teachers’ unions increases the highest teacher salaries by 2.6 percent and the lowest by 0.2 percent. Consistent with prior research, teacher union density was most strongly associated with highest salaries and had a nonsignificant positive association with lowest salaries. Teachers’ unions also affect the structural determinants of teachers’ salaries, offering some additional evidence supporting a median voter model. The proportion of unionized teachers with higher levels of education and experience (i.e., the highest paid) is positively related to highest salaries. Finally, our results confirm the importance of demand factors in teacher wage determination.