This report presents information regarding the patterns of variation in the salaries paid to public and private school teachers in relation to various personal and job characteristics. Specifically, the analysis examines the relationship between compensation and variables such as public/private schools, gender, race/ethnic background, school level and type, teacher qualifications, and different work environments. The economic conceptual framework of hedonic wage theory, which illuminates the trade-offs between monetary rewards and the various sets of characteristics of employees and jobs, was used to analyze The Schools and Staffing Survey (SASS) database. The national survey was administered by the National Center for Education Statistics during the 1987-88, 1990-91, and 1993-94 school years. Findings indicate that on average, public school teachers earned between about 25 to 119 percent higher salaries than did private school teachers, depending on the private subsector. Between about 2 and 50 percent of the public-private difference could be accounted for by differences in teacher characteristics, depending on the private subsector. White and Hispanic male public school teachers earned higher salaries than their female counterparts. Hedonic wage theory would predict that teacher salaries would be higher in schools with more challenging, more difficult, and less desirable work environments. Schools with higher levels of student violence, lower levels of administrative support, and large class sizes paid higher salaries to compensate teachers for the additional burdens. However, some of the findings contradict the hypothesis. For example, public school teachers working in schools characterized by fewer family problems, higher levels of teacher influence on policy, and higher job satisfaction also received higher salaries. In conclusion, the results are consistent with the hypothesis that a complex array of factors underlie the processes of teacher supply and demand and hence the determination of salaries. Teachers are not all the same, but are differentiated by their attributes. At the same time, districts and schools are differentiated by virtue of the work environment they offer. Seventeen tables and two figures are included. Appendices contain technical notes, descriptive statistics and parameter estimates for variables, and standard errors for selected tables. (Contains 84 references.) (LMI)

Educational reform is a big business in the United States. Parents, educators, and policymakers generally agree that something must be done to improve schools, but the consensus ends there. The myriad of reform documents and policy discussions that have appeared over the past decade have not helped to pinpoint exactly what should be done. The case for investment in education is an economic one: schooling improves the productivity and earnings of individuals and promotes stronger economic growth and better functioning of society. Recent trends in schooling have, however, lessened the value of society's investments as costs have risen dramatically while student performance has stayed flat or even fallen. The task is to improve performance while controlling costs. This book is the culmination of extensive discussions among a panel of economists led by Eric Hanushek. They conclude that economic considerations have been entirely absent from the development of educational policies and that economic reality is sorely needed in discussions of new policies. The book outlines an improvement plan that emphasizes changing incentives in schools and gathering information about effective approaches. Available research and analysis demonstrates that current central decisionmaking has worked poorly. Concentrating on inputs such as pupil-teacher ratios or teacher graduate degrees appears quite inferior to systems that directly reward performance. Nonetheless, since experience with such alternatives is very limited, a program of extensive evaluation appears to be in order. Attempts to institute radical change on the basis of currently available information involve substantial risks of failure. Many people today find proposals such as charter schools, expanded use of merit pay, or educational vouchers to be appealing. Yet there is little evidence of their effectiveness, and widespread adoption of these proposals is sure to run into substantial problems of im