OPEB Accounting and Teacher Diversity

Abstract

Despite extensive literatures documenting the importance of teacher diversity and teacher compensation, few studies explore relationships between the two. Fewer still examine effects of governmental accounting standards, even though these standards evolve regularly and could have substantial implications for how school districts allocate resources. I use staff- and district-level data from California to explore the effects on the teaching force of a change in accounting standards that required districts to recognize the costs of retiree health benefits (and other postemployment benefits, or OPEBs) as employees earned them. By making the true costs of this deferred compensation more apparent, this reform may have changed teachers’ incentives or encouraged districts offering such benefits to shift expenditures toward other aspects of compensation or working conditions more highly valued by relatively novice teachers (e.g., higher salaries). I illustrate how such reforms could impact the diversity of the teaching force by showing how teachers of different races and genders were likely to be differentially affected by deferred compensation policies due to differences in previous experience (and thus proximity to retirement). However, comparative interrupted time series analyses do not show that districts affected by the change in accounting standards saw their teaching staffs diversify at different rates than other districts. Thus, while the costs of deferred compensation are likely an important—and underdiscussed—factor in determining the diversity of the teaching force, accounting reforms alone are unlikely to moderate their impacts on the race and gender composition of teachers, at least in the medium term.