September 2014

Teacher staffing and pay differences: public and private schools

A study using Current Population Survey data shows that, from 1996 to 2012, elementary, middle, and high school teachers earned less than other college graduates, but the gap was smaller for public school teachers and smaller still if they had union representation; moreover, the mitigating effects are stronger for female than male teachers, so the within-gender pay gaps are much larger for male teachers.

The current school choice debate has many possible consequences, not just for students, but also for teachers. Broadly speaking, schools are either publicly or privately funded. Public schools are funded by the government through federal, state, and local taxes, and most are part of a larger school system. Elected school board members and education officials implement and oversee strict rules and procedures that public schools must follow. Private schools do not receive government money and thus have to raise their own funds. Private school officials may have more leeway to run schools as they see fit, but funders and others may play a significant administrative role.

Given the proliferation in school privatization, this article analyzes the fundamental differences between the two sectors with regard to teacher staffing and pay disparities. We employ the Current Population Survey (CPS) to document differences between teachers in the two sectors with regard to unionization density, gender and race or ethnicity, educational attainment, and relative pay gaps between public and private sector teachers and between both and other college graduates.

The debate about school privatization and the push toward both publicly and privately funded charter schools should include differences in teacher staffing and relative pay by school ownership. Staffing and pay differences across type of ownership may be due to or may influence factors such as teacher cohesion and student achievement. For example, teachers may trade off between pay and safer schools or smaller class sizes. (The pupil–teacher ratio in 2010 was 16.0 for public schools and 12.2 for private schools.)1 Or it could be that lower paid teachers desire to work at higher paying schools but competition prevents them from finding such employment.

The teachers studied in this article are elementary, middle, and secondary school teachers. Previous research on relative teacher pay has either analyzed teachers without respect to the type of school ownership or restricted the analysis to those employed in the public sector. Moreover, much of the focus has been on identifying a reasonable comparison group or set of occupations similar to teaching.2 Not much inquiry has been directed specifically toward pay differentials of teachers across ownership structures—that is, teachers in publicly or privately funded school systems.3

Student academic achievement depends in large part on the quality and experience of teachers. Thus, the ability of schools to recruit and retain excellent instructors is of great importance and is fundamentally linked to relative teacher pay. The opportunity cost of choosing to become a teacher is high if relative teacher pay falls substantially behind the pay of other professionals or other career paths. This consideration of opportunity cost also applies when teachers are deciding between the two sectors.

Research on elementary and secondary school teachers has shown that their pay has not been commensurate with that of other professionals and the gap has been widening.4 Although research on this topic has been contradictory,5 two previous studies by Sylvia Allegretto, Sean Corcoran, and Lawrence Mishel clearly evidenced a long-run decline in relative teacher pay.6 In their 2004 piece, they analyzed teachers in the public and private sectors as a group in comparison to other college graduates. Critics of the article inveighed against their selection of teachers from both sectors, because the two sectors differ on several fronts, making the teacher pay gap appear even larger with the inclusion of the private sector teachers. In response, in 2008 Allegretto, Corcoran, and Mishel published the results of a study in which the sample of teachers was restricted to those in the public sector. This work showed that public school teachers earned, on average, 15 percent less than comparable workers in 2006 but had slightly better fringe benefits than other professionals had—making up close to 2 percentage points of the pay gap.


1 Digest of education statistics (National Center for Education Statistics, 2010), Table 76,

2 See Andrew G. Biggs and Jason Richwine, Assessing the compensation of public-school teachers (Washington, DC: The Heritage Center for Data Analysis, November 1, 2011); and Sylvia A. Allegretto, Sean P. Corcoran, and Lawrence Mishel, How does teacher pay compare? Methodological challenges and answers (Washington, DC: Economic Policy Institute, 2004). Chapter 3 of the latter publication uses the National Compensation Survey (NCS) to identify 16 occupations similar to teaching on the basis of occupational leveling factors that measure skills and job tasks. Michael Podgursky and Ruttaya Tongrut, “(Mis-)measuring the relative pay of public school teachers,” Education Finance and Policy, Fall 2006, pp. 425–440, argue against employing household surveys, such as the Current Population Survey (CPS), in favor of using data from firms, such as data collected by the NCS, or state administrative data. Michael Podgursky, “Fringe benefits,” Education Next, Summer 2003, pp. 71–76, argues that professions chosen as alternatives to public sector teaching should be carefully considered. He suggests that journalists, registered nurses, and military officers are appropriate comparisons, along with private school teachers.

3 Biggs and Richwine, Assessing the compensation, argue that public sector teachers are overpaid compared with both private sector teachers and the private sector in general. See also Allegretto, Corcoran, and Mishel, How does teacher pay compare? in which the analysis included public and private school teachers without distinction; and Podgursky and Tongrut, “(Mis-)measuring the relative pay,” in which table 1 estimates separate public and private school teacher pay gaps that are similar to the teacher pay gaps we report here. However, Podgursky and Tongrut reject these pay gap estimates resulting from the use of CPS data, preferring NCS data (on firms) to CPS data (on households).

4 See Sylvia A. Allegretto, Sean P. Corcoran, and Lawrence Mishel, The teaching penalty: teacher pay losing ground (Washington, DC: Economic Policy Institute, 2008). Using U.S. Census Bureau data, these authors show that the pay gap between female public school teachers and comparably educated women—for whom the labor market dramatically changed over the 1960–2000 period—grew by nearly 28 percentage points, from a relative wage advantage of 14.7 percent in 1960 to a disadvantage of 13.2 percent in 2000. Among all public school teachers, the relative wage disadvantage grew almost 20 percentage points over the same period.

5 As mentioned earlier, Biggs and Richwine, Assessing the compensation, argue that public sector teachers are overpaid compared with both private sector teachers and the private sector in general. (See, however, Podgursky and Tongrut, “(Mis-)measuring the relative pay,” for the view that public sector teachers are not overpaid.)

6 Allegretto, Corcoran, and Mishel, The teaching penalty, especially endnote 1; and Allegretto, Corcoran, and Mishel, How does teacher pay compare? For a different view, see Podgursky and Tongrut, “(Mis-)-measuring the relative pay.”

1next page

View full article
About the Author

Sylvia A. Allegretto

Sylvia A. Allegretto is an economist and codirector of the Center on Wage and Employment Dynamics at the Institute for Research on Labor and Employment, University of California, Berkeley.

Ilan Tojerow

Ilan Tojerow is an assistant professor of applied economics at the Solvay Brussels School of Economics and Management (dulbea, Ceb) of the Université Libre de Bruxelles, Brussels, Belgium, and the Institute for the Study of Labor, Bonn, Germany.