The State Role in Teacher Compensation

INTRODUCTION Policy makers have long been concerned with K– 2 teachers’ compensation. Not only might increased teacher compensation purchase more skilled teachers, it might also influence how long teachers stay at their schools and in the teaching profession. Similarly, changes in the structure of teacher salary schedules may change the appeal of teaching even if average salaries remain the same. Much of the extant research on K–2 teacher salaries shows, to no great surprise, that teachers respond to salary changes (for examples, see Baugh and Stone 982 and Murnane and Olsen 989, 990). Teachers’ salaries are just one component of teachers’ overall compensation, however. States and school districts also provide other incentives—both monetary and nonmonetary—aimed at attracting and retaining teachers. These incentives often target certain types of teachers in certain types of positions. In addition, teachers receive health and welfare and retirement benefits that add to their total compensation packages. This policy brief examines the state role in these three components of total K–2 teacher compensation— base salary, benefits, and other incentives—showing how states across the country are going beyond simple salary structures to compensate teachers. We also examine how teachers’ compensation targets teachers at different points in their career cycles. Some components aim at recruiting teachers, others target retention of early career teachers, and still others aim at the retention and efficient release of older and retirement-eligible Susanna Loeb