Do More Effective Teachers Earn More Outside the Classroom?

Abstract

We examine earnings records for more than 130,000 classroom teachers employed by Florida public schools between the 2001–2 and 2006–7 school years, roughly 35,000 of whom left the classroom during that time. A majority of those leaving the classroom remained employed by public school districts. Among teachers in grades 4–8 leaving for other industries, a 1 standard deviation increase in estimated value added to student math and reading achievement is associated with 6–8 percent higher earnings outside teaching. The relationship between effectiveness and earnings is stronger in other industries than it is for the same groups of teachers while in the classroom, suggesting that current teacher compensation systems do not fully account for the higher opportunity wages of effective teachers.