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You Get the Teachers You Pay for

Paula Razquin
School of Education
Stanford University
March 2002

This research is about female teachers' salaries in three Latin American countries. Instead of looking at how much teachers earn, I look at their "relative salaries", how much they earn relative to women in other occupations. Teachers' relative salaries have an influence on the kind of women that choose to teach, their ability, job attendance, and job motivation. Knowing how attractive teachers' salaries are compared to other women's salaries would be an indication of the quality of teachers the education systems are recruiting.

An important issue for education is how to recruit and retain good teachers. Economists suggest that people choose a job depending on their preferences for different characteristics of the job, for example, working conditions or amount of hours worked. These preferences are crucial for people's choices, yet economists found that one of the most crucial one is the "relative salary," how much they would earn compared to the salary they could get in other jobs. Relative salaries affect not only people's occupation choices but also their job attendance and job motivation. Economists also suggested that, other things being equal, most capable people would be in a better position to choose those occupations with higher paying jobs.

In my research, I use statistical methods to estimate the relative salary of female teachers. I focus only on women because women do not have the same occupational opportunities as men do, so the average salary they could get in other jobs are not comparable to the average salary men could get in those other jobs. If I included male teachers and then compared all teachers' salaries to all salaries in other occupations, I would be comparing oranges and apples.

I estimate female teachers' relative salaries for three Latin American countries, Argentina, Chile, and Uruguay, and two years, 1987 and 1996. I selected three countries that, until the seventies, had similar social and economic history and similar systems for managing teachers. Since the seventies, however, the countries started to differentiate from each other in the labor market and education policies they implemented. In the nineties, one finds three different systems for managing teachers. In Chile, for example, although the administration and payment of teachers continues to be in hands of the municipalities as it has been since the eighties, minimum salaries for teachers are now set by the federal government. In Argentina, teachers' administration, payment, and salary levels are now in hands of the regional governments, the provinces, and not the federal one as it used to be. In Uruguay, teachers' administration, payment, and salary levels were and continue to be in hands of the federal government. The benefit of studying these three countries for two years is that I can link the findings to the overall debate about how the economic and education policies implemented since the late eighties might condition teachers' relative salaries.

Data come from surveys that the ministries of economics of the three countries conduct annually. I concentrate on two comparisons. First, I compare the salary of non-certified teachers, those who are teaching with just a high school credential, with the salary of women with the same type of credential but working in other occupations. This group also includes older cohorts of certified teachers who obtained their credential, before the seventies, in high schools that offered a major in education. Second, I compare the salary of certified teachers with the salary of women with a higher education credential of any type but working in other occupations. The results suggest that, for non-certified teachers, the three countries might be recruiting the most capable women among the pool of women with a high school credential. on the contrary, for certified teachers, Chile and Uruguay might be recruiting the least capable and motivated women among the women with a credential from a higher education institution. Argentina, on the other hand, might be recruiting the most capable women.

What policy makers should know is that the effect that an across-the-boarder increase in teachers' pay might have on the quality of teachers will depend, in part, on how well they are able to screen potential teachers with respect to their ability. But it will also depend on how responsive women and potential teachers are to their relative salaries and what occupational opportunities and salaries are out there in the labor market for women. You get what you pay for, says the idiom. Why would that be any different for female teachers?