Summary
Teacher unions have fought long and hard against governmental support for private institutions (such as vouchers and tuition tax credits) arguing they will destroy public education. Despite their shallow claims, increased competition in the educational market leads to a greater labor market competition, which reduces reduces the monopsony, or power, of teacher unions that depresses teacher salaries. Using data from over 600 Ohio school districts revealed that increased private school competition leads high salaries for public school teachers.
I. Why Are Union Leaders Fighting Privitization?
If teacher unions, such as the National Education Association (NEA) and the American Federation of Teachers (AFT), are suppose to be on the same side as the teachers it represents, than why are they trying so hard to combat privatization, which could potentially raise teacher's salaries?
The first explanation for this behavior of the teacher unions is that in order to maximize its size and power, and maintain it monopsony over the system, it may be disregarding the interests of its members in act of self-interest. Since increased competition would reduce the union membership, their economic power would fall, and possibly along with their own salaries and authoirty.
The second interpretation for why teacher unions oppose privatization is they are trying to maintain long-term economic rents that correlate with political power. Since private school teachers make about 40 percent less than public school teachers, it can be said that these teacher unions have taken out economic rents for their members. By reducing union membership, the long-run ability of the unions to use political power to maintain these rents would be lowered.
II. What Does Private School Competition Do To Public School Teacher Salaries?
Despite what union leaders try to falsely advertise to get their way, an economic theory does indeed suggest that competition within the educational market should raise the salaries of public school teachers. More specifically, increased privatization introduces labor competition, reducing monopsony power of public school districts. In most communities, there is typically a low-cost commuting range in one public school district within a large pool of teachers. By extracting some of these teachers and placing them in private schools, there will be an increased salary competition between educational providers in order to lure in better teachers to the public schooling system. Based on this information, and some previous evidence, one can conclude that the presence of private school competition can indeed lead to a raise the public school teacher's salary.
III. Testing the Hypotheses: Data and Methodology
Data was collected from 612 public school districts in the State of Ohio. These districts were required to report data on literally hundreds of variables. The information on attendance in private schools was also used from the 1990 U.S. Census of Population.
Variables:
Teacher Characteristics: experience (average number of years of teaching experience in a school's district) and master's (the percent of teachers who obtain at least a master's degree). It is expected that salary will be strongly correlated to these two variables.
School District Characteristics: spending (expenditure per student), class size (ratio of students to teachers), and enrollment (average membership in a school's district). It is expected that more affluent districts pay higher salaries. Also, evidence suggests that rising teacher salaries in correlated with increased expenditures per student. A positive correlation is hypothesized between both enrollment and class size to salary.
Parental Characteristics: income (average family income) and education (the percent of the population over 25 years old with a college degree). It is expected that these two variables will be positively correlated with salary.
Overall, it is expected that the greater the public school competition, then the greater the average salary will be in any given public school district.
IV. Empirical Results
The hypothesized positive relationship between private school competition and salary per teacher is significant at the one percent level. The average paid teacher is estimated to earn over 5 percent ($1,892) more in the district with public and private labor competition. The findings also revealed that each dollar increase in spending per pupil is estimated to increase teacher salaries by $1.82.
It is also found that there is a very strong relationship between income and salary. Teachers in higher income districts did indeed have a greater average in annual salary than those in less affluent areas.
V. Conclusion
When using the results of the Ohio data, it can be concluded that competition in the market for teachers means higher salaries for public school educators. These research findings based on school competition also present an alternative to the unionization of public schools and its monopsony effects on salaries being raised in public school monopolies.
I. Why Are Union Leaders Fighting Privitization?
If teacher unions, such as the National Education Association (NEA) and the American Federation of Teachers (AFT), are suppose to be on the same side as the teachers it represents, than why are they trying so hard to combat privatization, which could potentially raise teacher's salaries?
The first explanation for this behavior of the teacher unions is that in order to maximize its size and power, and maintain it monopsony over the system, it may be disregarding the interests of its members in act of self-interest. Since increased competition would reduce the union membership, their economic power would fall, and possibly along with their own salaries and authoirty.
The second interpretation for why teacher unions oppose privatization is they are trying to maintain long-term economic rents that correlate with political power. Since private school teachers make about 40 percent less than public school teachers, it can be said that these teacher unions have taken out economic rents for their members. By reducing union membership, the long-run ability of the unions to use political power to maintain these rents would be lowered.
II. What Does Private School Competition Do To Public School Teacher Salaries?
Despite what union leaders try to falsely advertise to get their way, an economic theory does indeed suggest that competition within the educational market should raise the salaries of public school teachers. More specifically, increased privatization introduces labor competition, reducing monopsony power of public school districts. In most communities, there is typically a low-cost commuting range in one public school district within a large pool of teachers. By extracting some of these teachers and placing them in private schools, there will be an increased salary competition between educational providers in order to lure in better teachers to the public schooling system. Based on this information, and some previous evidence, one can conclude that the presence of private school competition can indeed lead to a raise the public school teacher's salary.
III. Testing the Hypotheses: Data and Methodology
Data was collected from 612 public school districts in the State of Ohio. These districts were required to report data on literally hundreds of variables. The information on attendance in private schools was also used from the 1990 U.S. Census of Population.
Variables:
Teacher Characteristics: experience (average number of years of teaching experience in a school's district) and master's (the percent of teachers who obtain at least a master's degree). It is expected that salary will be strongly correlated to these two variables.
School District Characteristics: spending (expenditure per student), class size (ratio of students to teachers), and enrollment (average membership in a school's district). It is expected that more affluent districts pay higher salaries. Also, evidence suggests that rising teacher salaries in correlated with increased expenditures per student. A positive correlation is hypothesized between both enrollment and class size to salary.
Parental Characteristics: income (average family income) and education (the percent of the population over 25 years old with a college degree). It is expected that these two variables will be positively correlated with salary.
Overall, it is expected that the greater the public school competition, then the greater the average salary will be in any given public school district.
IV. Empirical Results
The hypothesized positive relationship between private school competition and salary per teacher is significant at the one percent level. The average paid teacher is estimated to earn over 5 percent ($1,892) more in the district with public and private labor competition. The findings also revealed that each dollar increase in spending per pupil is estimated to increase teacher salaries by $1.82.
It is also found that there is a very strong relationship between income and salary. Teachers in higher income districts did indeed have a greater average in annual salary than those in less affluent areas.
V. Conclusion
When using the results of the Ohio data, it can be concluded that competition in the market for teachers means higher salaries for public school educators. These research findings based on school competition also present an alternative to the unionization of public schools and its monopsony effects on salaries being raised in public school monopolies.
Analysis
Authors Richard Vedder and Joshua Hall used logos to write a peer-reviewed and research-based article. They used statistics, figures, and data to support their arguments that there is a positive correlation between competition in the educational market and public school teacher salaries. Even though they are clearly biased against unions, they provided many examples and interpretations to back their suggestions rather thanjust stating their opinions. The only issue that the authors tended to repeat was their tendency to reiterate what they may have gone over earlier. Not only did they repeat themselves a lot, but they also consistently went into detail about a topic they already covered and already gave sufficient information for. Other than its proneness to bunny-trail and over-analyze, it was a very informative and well-written article that painted a clear picture with the use of charts and data to support its claims.
Reflection
When the article mentioned that "it is expected that more affluent districts pay higher salaries" my mind automatically went back to all of my articles that have talked about how great of an impact local funding has on public schools. The majority of my articles have at least mentioned local funding and have tied it back to how it effects a topic, in this specific situation the topic is teacher salaries. I did not realize going into my line of inquiry how much power local federal funds could have on a public school; it basically controls almost every aspect of it from how many textbooks a classroom receives to how much money is going to be in a teacher's paycheck.
My last few article posts have also mentioned the controversial topic of private school vouchers. Even though they are thought to be a bad thing, my last few posts, including this one, show that there is more to them then their negative false advertisements by teacher unions. My last article, Private School Vouchers Are The New Incentive For Public School Improvement, shows a positive correlation between private school vouchers and an increase in public school performance. This article, on the other hand, shows a positive correlation between private school vouchers and an increase in public school teachers' salaries.
After all of the research I have done I can definitely conclude, based on statistics and data, that private school vouchers contribute more to the public school system then they take away.
VEDDER, RICHARD, and JOSHUA HALL. "Private School Competition and Public School Teacher Salaries." Journal of Labor Research. 21.1 (2000): 162-168. Print.
My last few article posts have also mentioned the controversial topic of private school vouchers. Even though they are thought to be a bad thing, my last few posts, including this one, show that there is more to them then their negative false advertisements by teacher unions. My last article, Private School Vouchers Are The New Incentive For Public School Improvement, shows a positive correlation between private school vouchers and an increase in public school performance. This article, on the other hand, shows a positive correlation between private school vouchers and an increase in public school teachers' salaries.
After all of the research I have done I can definitely conclude, based on statistics and data, that private school vouchers contribute more to the public school system then they take away.
VEDDER, RICHARD, and JOSHUA HALL. "Private School Competition and Public School Teacher Salaries." Journal of Labor Research. 21.1 (2000): 162-168. Print.