Invisible Shifts in and Out of the Classroom: Dynamics of Teacher Salary and Teacher Supply in Urban China

Abstract

Background The remarkable economic growth in contemporary China is unprecedented, but scholars voice concerns regarding unintended consequences during this transitional phase. Of particular concern is the constant challenge to staff schools with highly qualified teachers. Purpose This study sets out to understand subtle yet consequential changes in schools during a sustained period of economic boom, through the lens of teacher occupational choice. This study contributes empirically to the teacher occupational choice literature by identifying the magnitude of lag in wage growth and returns to human capital in the teaching profession, and their critical relationship affecting high-ability workers’ career decisions. Research Design Using a nationally representative repeated cross-sectional data set spanning a quarter century (1988–2013), this study estimates Mincer earnings function regression models and multinomial probit regression models to assess wage differentials and heterogeneous rates of return to human capital in teaching and nonteaching sectors, in addition to untangling complex relationships between worker quality and observed occupational choice. Findings We documented several novel facts about teachers in contemporary urban China. First, we found sharp shifts in the relative career attractiveness of teaching, such that a 13% wage premium for teachers in 1988 dissipated over time and regressed to a 11% wage penalty in 2013, when compared with similar workers. Second, returns to tertiary education are markedly higher in nonteaching careers—about 11–15 percentage points more so than in teaching. Third, highly educated workers in younger cohorts are half as likely to become teachers relative to older cohorts, particularly in recent years. Conclusions The authors contextualize findings and discuss appropriate policy implications. Most importantly, holding back teacher wage levels from broader market prices has consequential effects on teacher supply. Policy makers need to reconsider existing forms of teacher compensation arrangements and develop sustainable wage dynamics that can attract and retain bright minds to enter and stay in teaching.

Cognitive Returns to Having Better Educated Teachers: Evidence from the China Education Panel Survey

“…On the whole: findings in the present study contribute new evidence to a large cluster of studies highlighting the importance of teacher education (Liu and Xie 2021) and that more qualified individuals are also more likely to be competent and effective in meeting a variety of instructional needs (Loeb et al 2014). While some scholars question the usefulness of policies aimed at improving teacher education and increasing teacher educational attainment, findings in this present study refute such doubts by illuminating the significant and substantive cognitive returns associated with having better educated teachers.…”

“…Coinciding with rising policy attention in attracting talented individuals to join the teacher workforce, teacher education researchers and teacher policy makers have become increasingly interested in understanding how observable traits are related to student learning improvements (Liu and Xie 2021). In theoretical terms, holding a higher level of educational attainment can imply either a better state of a teacher's own level of human capital development, or can act as a positive signal of adept innate ability, academic motivation, and cognitive skills development compared to those teachers without such credentials.…”

College Teacher Performance: A Literature Review

“…Vagi (2019) analyzed data from apprenticeship teacher preparation programs and found that more qualified student teachers were more likely to enter and remain in the profession. In addition, Liu's (2021) findings highlight the critical role of teachers' salary growth and human capital returns on career decisions. García's (2022) research revealed a positive relationship between teachers' basic salary and students' academic performance.…”