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Are U.S. teacher salaries competitive? Accounting for geography and the retransformation bias in logarithmic regressions

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  • Blackburn, McKinley L.

Abstract

Using data from the American Community Survey for 2012-2016, I estimate relative earnings differentials between teachers and observationally equivalent non-teachers. Two concerns at primary issue in the paper are adequately controlling for differing geographic locations of teachers and non-teachers, and addressing the bias that can arise in the use of logarithmic specifications of earnings regressions to estimate average wage differentials. I find that both issues are of relevance: while ignoring disparate location biases the differential away from zero, failing to account fully for differences in the distribution of earnings for teachers and non-teachers biases it towards zero. An analysis of data from the 2007-2011 American Community Survey suggests that that the magnitude of the teacher pay differential has increased since that time. Other suggested corrections, based on earlier research on differential time misreporting and benefit differences, lead to a smaller but still economically significant differential.

Suggested Citation

  • Blackburn, McKinley L., 2021. "Are U.S. teacher salaries competitive? Accounting for geography and the retransformation bias in logarithmic regressions," Economics of Education Review, Elsevier, vol. 84(C).
    • Handle: RePEc:eee:ecoedu:v:84:y:2021:i:c:s027277572100087x
    DOI: 10.1016/j.econedurev.2021.102169
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    More about this item

    Keywords

    Teacher pay; Wage differentials; Quasi-maximum likelihood estimation;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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