Teacher Salaries and Teacher Unions: A Spatial Econometric Approach

Abstract

This paper uses the Schools and Staffing Survey to examine the determinants of teacher salaries in the U.S. using a spatial econometric framework. These determinants include teacher salaries in nearby districts, union activity in the district, union activity in neighboring districts, and other school district characteristics. The results confirm that salaries for both experienced and beginning teachers are positively affected by salaries in nearby districts. Investigations of the determinants of teacher salaries that ignore this spatial relationship are likely to be mis-specified.Including the effects of union activity in neighboring districts, the study also finds that union activity increases salaries for experienced teachers by as much as 18-28 percent but increases salaries for beginning teachers by a considerably smaller amount. JEL Classification: J45; J50.

The Wage Impact of Teachers Unions: A Meta‐analysis

“…Within‐state variation also makes the estimates more susceptible to the impact of threat effects. Winters () utilizes a spatial model to explicitly control for threat effects. If threat effects are a significant driver of teachers wages, estimates utilizing within‐state variation that do not control for these effects may negatively bias the union impact.…”

“…Part of the literature we survey attempts to identify the type of teachers that are served by the unions by examining the differing impacts on new and senior teachers earnings (Han ; Lipsky and Drotning ; West and Mykerezi ; Winters ; Zwerling and Thomason ). The consensus is that teachers unions increase the earnings of senior teachers, but not new hires.…”

“…There are only four papers that we identify as utilizing the best empirical methods. These are Han (), Hoxby (), Lovenheim (), and Winters (). We do not include estimates from Hirsch, Macpherson, and Winters () because the authors question the large magnitude of their results in the instrumental variables specification.…”

“…Lentz () uses data from 1989 to 1990. Winters () and Hirsch, Macpherson, and Winters () both use data from 1999 to 2000. We classify these studies according to the end date.…”

Teachers’ Unions, Compensation, and Tenure

“…He attributes the difference between his results and Hoxby's to measurement error in the Census of Governments. Arguing for the need to consider geographic influences on teacher's salaries alongside union effects, Winters () uses data from 1999–2000 and finds that unions increase salaries for experienced teachers by as much as 18 to 28 percent but that their impact on starting salaries is much smaller.…”