Patterns of compensation of public and private school teachers

Abstract

General impressions suggest that public school teachers are paid higher salaries than private school teachers. Indeed, the evidence is consistent with this general impression. But why the difference? Do public school teachers have better qualifications? Are private schools better places in which to work, and are they able to pay lower wages for comparable teachers? Do public and private schools even operate in the same market for teaching personnel? Are those individuals who seek employment in the private school sector from the same population as those seeking public school employment? What part does the ownership structure of the school play in the determination of teacher compensation? It is the purpose of this paper to provide some insights into these and related questions about the patterns of variation in compensation of public and private school teachers. Our findings reveal that public school teachers earn more than teachers in non-public schools. Teachers in parochial schools are the lowest paid, while teachers in non-sectarian private schools are the highest paid among non-public school teachers. There appear to be structural differences in the patterns of wage variation between the different sectors. Public school teachers possess greater quantities of those characteristics that are valued in the market than non-public school teachers. Non-public school teachers sacrifice between 10 and 40% of the public school teacher salary to work in the non-public sector (depending on the type of school within the non-public sector) and they are aware of their sacrifice. Organizational and ownership structure of the school also appears to make a difference in salaries, with profit-making schools being among the lowest paying, second only to parochial schools.