Previous research has established the returns to academic ability in the general labor market, and this paper investigates such returns in the teacher labor market. Using a nationally representative sample of public school teachers, I find that teachers who graduate from the most selective undergraduate institutions have salaries that are between…

Some scholars and policymakers who are concerned about the inequitable distribution of quality teachers suggest offering financial incentives for working in hard-to-staff schools. Previous studies have estimated compensating differentials using hedonic modeling, an approach potentially undermined by district-wide salary schedules and the lack of…

This article presents a principal-agent model in the context of public schools to help explain the use of merit pay for teachers. The model considers how both the nature of teaching and the political costs of union resistance affect school district merit pay decisions. Our results support the idea that merit pay is more likely in environments…

There is significant public policy concern that teacher salaries in the United States are insufficient to make teaching in public schools financially attractive; consequently, there are not enough high-quality teachers. This concern has been particularly acute of late for two reasons. First, new empirical research shows teacher quality to be the…