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The Equity Problem in Teacher Pensions

BY Laura Anderson
Rapid Response Logo

Marguerite Roza and Katherine Hagan

Published January 2017 by Edunomics Lab

Teacher salaries and teacher pension payments both draw from the total pot of public dollars available for educating students. But while prior research has documented systematic spending inequities created by uneven teacher salaries, pensions—until now—have remained largely unexamined from an equity lens. This Rapid Response brief makes a first attempt to better understand the scope of variation in how pension funds are applied across schools. The question is whether that variation is random or coincides with student demographics in a way that raises concern.

Our analysis finds that within the same district, teachers in schools with the highest percentage of minority students enrolled accrue less annual publicly funded pension wealth than teachers in schools with the lowest share of minority students. At the root of this issue is a system driven largely by late-career salaries, salaries linked to years of experience, with more senior teachers tending to congregate in the schools that serve a smaller share of minority students than others in a given district. In other words, the way pension wealth accrual is currently structured, on average, shortchanges high-minority schools, resulting in inequitable deployment of public monies for K-12 education. Our analysis points to the need for pension dollars to be more transparent and included in discussions around K-12 spending equity.

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