Abstract
This paper uses the Schools and Staffing Survey to examine the determinants of teacher salaries in the U.S. using a spatial econometric framework. These determinants include teacher salaries in nearby districts, union activity in the district, union activity in neighboring districts, and other school district characteristics. The results confirm that salaries for both experienced and beginning teachers are positively affected by salaries in nearby districts. Investigations of the determinants of teacher salaries that ignore this spatial relationship are likely to be mis-specified. Including the effects of union activity in neighboring districts, the study also finds that union activity increases salaries for experienced teachers by as much as 18-28 percent but increases salaries for beginning teachers by a considerably smaller amount.
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