Compensation, Benefits & Pensions
By far the largest category of spending in American public school districts is employee salaries and benefits. Nationally, for every $10,000 that districts spend, about $8,000 goes toward staffing costs.
At the Edunomics Lab, we analyze how districts structure their compensation packages to attract and retain high-quality educators. Through that lens, we consider the full compensation package, including base teacher salaries plus any stipends or incentives, as well as benefits including retirement (pensions) and health care.
Our analyses focus on the distribution of salaries versus benefits, whether staffing dollars are spent equitably, and how compensation can be used to address other important goals, such as teacher quality and diversity. These include districts that give bonuses to effective teachers who take on more students and raise pay for early-career teachers as a way to strengthen the teaching force and reduce runaway pension costs.
Relevant Resources
There’s a fiscal cliff coming, and some districts appear hell-bent on making it worse
Districts are right to worry about a fiscal cliff when federal relief aid runs out, cautions Marguerite Roza, but leaders have options beyond handwringing.
From Paying Parents to Transport Their Kids to School to Calling Out the National Guard — Innovating in the Face of a Bus Driver Shortage
How districts react to unusual labor challenges like the bus driver shortage may tell us whether they can adapt to meet the moment and which, if any, will consider adopting innovations common in industries outside of education.
Districts Like San Diego Could Be Locking Themselves Into Painful Cuts Down the Road
Rather than making long-term commitments that can lead to financial stress down the road, Chad Aldeman suggests there are other ways for districts to both raise pay and build capacity.
Teacher Dissatisfaction May Be High, But So Are Retention Rates
Across Washington state, public schools retained a higher percentage of teachers last year than they do in normal years. That's important information for school district leaders as they decide how to spend the windfall of federal relief funds headed their way.
Billions of Federal Funds Are Coming to Schools. How Should They Spend Them?
Adding staff has been the main “big bet” in public education for decades. With new federal relief aid heading to schools, will district leaders meet the moment with new and different ideas for what students need now?
By Paying Stipends to Schools’ Teaching Staff, Districts Can Add Learning Time Without Breaking the Bank
In this commentary at The 74, Chad Aldeman shows how offering current teachers stipends to take on more hours could provide students with additional learning time without locking districts into long-term financial obligations.
A way to ease student loan debt without sticking taxpayers with the bill: How about a trade?
In this Forbes commentary, Marguerite Roza proposes a way for the federal government to provide student debt relief while putting SS/Medicare back on a financially sustainable path.
How Lawmakers Can Raise Teacher Pay Without Decimating Pension Funds
In this op-ed, Marguerite Roza analyzes how making any near-term teacher raises non-pensionable could impact state governments and K-12 teachers and students.
Could states save money if raises during a recession were designated as non-pensionable?
This brief examines how making raises non-pensionable would impact teacher pensions and government pension debt.
A free college plan that pays for itself
In this op ed published by The Hill, Marguerite Roza proposes a way for the federal government to pay for college without boosting federal debt or burdening taxpayers.
What Role Should the Federal Government Play in Addressing State and Municipal Pension Debts?
In this guest blog post, Marguerite Roza shares how the federal government might address state and municipal pension debt in the midst of budget shortfalls due to COVID-19.
The Big Bet on Adding Staff to Improve Schools Is Breaking the Bank
By going all-in on staffing, we’ve crowded out other potential investments that can positively impact student learning. In this paper, Marguerite Roza writes that competing strategies should be viewed through the lens of which can do the most for students with the limited dollars at hand.
One Reason Millennials Might Say “OK Boomer” This Holiday Season
Past generations racked up billions in teacher pension debt and younger generations are now expected to pay for it. This blog shows how a multi-generational discussion of that topic might play out.
Chicago Teachers Nearing Retirement Paid a Big Price in Striking
Chicago's senior teachers got hit with a double whammy. As we discuss in this blog, for those at the top of the pay scale retiring in the next four years, the strike meant lost wages and a decrease in future pension payments.
Leaders Ignored Teacher Pension Debt. Now There’s Less Money for Teacher Salaries and Students
This brief quantifies, in per pupil and per teacher terms, the magnitude of the crowd-out that pension debt creates for six states: CA, IL, LA, SC, TX, and VT. The goal is to help education leaders grasp the relationship between their pension debt bills and their aspirations for spending on schooling inputs, including teacher salaries.
Chicago’s Teachers Union Agreed to Give Spending Control to Principals. Now, the Union Is Striking to Take It Away
Chicago teacher contract negotiations stalled over who controls staffing decisions in schools. In this commentary, Marguerite Roza explains why principals should be entrusted to make the spending decisions that best serve their students.
A Way to Get School Finances Back Under Control
This commentary lays out why it may be time for states to establish agencies modeled on the federal Government Accountability Office (GAO) to certify school district obligations before they take effect and push districts into financial crisis.
The Equity Problem in Teacher Pensions
This brief shows how high-minority schools receive fewer dollars in pension wealth than low-minority schools within the same district, and makes the case for pension dollars to be more transparent and included in discussions around K-12 spending equity.
Breaking tradition: A fixed-dollar pay raise strategy that benefits teachers and school districts
In this paper we examine both the degree to which pay systems for teachers are more heavily back-loaded than for many other professions and the ramifications of this steep salary curve for teachers, states and school districts.
How the teacher pay raise formula could worsen Seattle’s inequity
In this oped Marguerite Roza describes one critical issue underlying the fall 2015 Seattle Public Schools teachers' strike that neither the Seattle School District nor the Seattle Education Association.
Turning a Benefits Conundrum into a Potential Opportunity for Teachers and Students
This analysis shows how a longer work year could increase teachers’ annual salaries and improve student outcomes.
Teachers’ Pensions and the Overgrazed Commons
Commentary by Marguerite Roza and Michael Podgursky on how big raises to teachers nearing retirement is a recipe for letting pension debt get out of control.
Paying the Best Teachers More to Teach More Students
In this analysis we find how allowing our best teachers to teach more students in lieu of hiring additional staff could offer significant teacher bonuses. Findings are modeled state-by-state.
How Late-Career Raises Drive Teacher-Pension Debt
In this paper we model the impacts of late-term raises on teacher pension obligations showing that on average each dollar raise triggers $10 to $16 in new taxpayer obligations and provide suggestions to mitigate such impacts while improving incentives for early and mid career teachers.
Rethinking Class Size to Expand Access to Best Teachers and Raise Pay
In this presentation at the annual Association for Education Finance and Policy conference, we share our exploration and cost modeling of cost-neutral options to raise teacher pay and give more students access to the best teachers.
The SEA of the Future: Prioritizing Productivity
In this volume of The SEA of the Future, Marguerite Roza co-authored two essays examining how state leaders, challenged with having to make decisions on how to use limited resources, are faced with an uneasy zero-sum game: every dollar they put into one program is a dollar not spent in another.
Teacher Retirement Benefits: Defining a More Active Role for SEAs and Their Chiefs
In this essay from The SEA of the Future Volume 2, Marguerite Roza and Michael Podgursky look in depth at the startling long-term costs of educator pension systems and the counterproductive employment incentives embedded in these systems.
What Happens to Teacher Salaries During a Recession?
This study uses data from Seattle Public Schools to explore actual salary changes amidst rapid changes in economic context and the effect of the recession on teacher pay.
Q&A on the Chicago Teachers Contract Math
This brief examines the real numbers on the Chicago teachers contract costs.
Chicago Teacher Salaries in the Regional Chicago Context
This brief examines how Chicago teacher salaries compare in regional and national contexts.
The Sheepskin Effect and Student Achievement: De-emphasizing the Role of Master’s Degrees in Teacher Compensation
This brief dissects the nation’s sizable investment in master’s bumps as a means of highlighting policy obstacles to a more smartly differentiated compensation approach.
The Promise of Cafeteria-Style Benefits for Districts and Teachers
While typical school district plans offer a one-size-fits-all package of benefits to employees, cafeteria plans allow employees to customize their benefits within a given cost, an option districts may want to consider.
Washington State High Schools Pay Less for Math and Science Teachers than for Teachers in Other Subjects
This paper examines the reasons why math and science teachers struggle to reach the same salaries as others, concluding that the state-wide salary schedule is in part to blame.
The Disproportionate Impact of Seniority-Based Layoffs on Poor, Minority Students
A study of California's 15 largest districts indicates that "last in, first out" policies disproportionately affect the programs and students in their poorer and more minority schools than in their wealthier, less minority counterparts.
Beyond Teacher Reassignments: Better Ways Districts Can Remedy Salary Inequities Across Schools
This brief demonstrates how, contrary to common worry, closing Title I's "comparability provision" loophole would not force districts to mandatorily reassign teachers.