Adjusting State Public School Teacher Salaries for Interstate Comparison

Source: Dan S. Rickman, Hongbo Wang, John V. Winters, Public Finance Review, OnlineFirst, Published June 20, 2017
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From the abstract:
Using the three-year microdata sample of the American Community Survey for 2009 to 2011, we compute public school teacher salaries for comparison across US states. Teacher salaries are adjusted for state differences in teacher characteristics, cost of living, federal tax rates, household amenity attractiveness, and location within the metropolitan versus nonmetropolitan portions of the states. We find high persistence in the state rankings of nominal public school teacher salaries across time. Yet, we also find that the rankings significantly shift with the adjustments, suggesting they are necessary for meaningful comparisons of public teacher salaries across states. The differences in teacher pay across states also greatly narrow with the adjustments. Finally, this is the first study to show and test that teacher salary comparisons across states should be based on a comparison of public school teacher salaries with nonteacher college graduates in the states, adjusted for differences in personal characteristics and effective federal tax rates.