Illinois Salary Gaps – Do they matter?

I picked up this article on Twitter yesterday, which seemed at first to make a veiled version of the classic “money doesn’t matter” argument, or at least that’s how the tweets and headlines were spun. The article is somewhat more thoughtful, discussing many reasons why teacher salaries vary and how those variations are largely tied to differences in taxable property wealth across Illinois school districts, but the article misses a real opportunity to shed light on some striking disparities across the state and across districts within the Chicago metro area.,0,1639857.story

So, how might we better understand salary variation across Illinois school districts and children, and whether that variation is problematic or not? First, we know that teachers matter! Second, we know from work by Hanushek and Rivkin that the uneven distribution of teaching quality by racial composition of students can explain substantial portions of the growth in achievement gap – black-white gap – between 3rd and 8th grade. To quote:

Unequal distributions of inexperienced teachers and of racial concentrations in schools can explain all of the increased achievement gap between grades 3 and 8. (p. 1)

Further, we know from these same authors in an earlier study that:

Table 7 suggests that a school with 10 percent more black students would require about 10 percent higher salaries in order to neutralize the increased probability of leaving. (p. 38 of PDF, not numbered)

Recap – Two major factors determining how well kids do in school are the characteristics of the other kids in the same class and the quality of their teacher. Unfortunately, the characteristics of kids in a given class affects who typically ends up teaching that class. Classrooms with greater shares of minority children end up with less well educated, less experienced teachers. This, in combination with peer effects, produces substantial disparities in outcomes which grow over time. Salary differentials might help to offset these disparities.

As such, it would likely be quite problematic if the teacher salaries in Illinois – WITHIN ANY GIVEN LABOR MARKET – were systematically lower in districts with higher concentrations of black and/or black and hispanic children. By cursory analysis it is rather difficult to disentangle the adverse affect of salary alone. That is, you can’t just take average salaries and try to relate them to average test scores, and then conclude that salaries don’t matter, but student characteristics do. The reality is that the two simultaneously matter and interact in important ways.

In many states, salaries and overall funding are actually comparable between districts with higher minority concentrations and other districts and in some states salaries and overall funding are actually higher (though not necessarily enough higher) in higher minority concentration districts (see:


In my most recent analysis of individual teacher salary data for 2004 to 2008 in Illinois, I find that for a full time teacher, at constant contractual months, same degree level and same experience, and compared to districts in the same labor market, the teacher in a school that is majority black and Hispanic children, is paid about $2,000 less per year. Further, a teacher with a masters degree makes about $8,500 more per year. And, teachers in majority minority schools in Illinois are only about 60% to 70% as likely to hold a masters degree as teachers in predominantly white schools in the same labor market in Illinois.

We also know that the dropout rate is over 7% higher in majority minority districts compared with other districts in the same labor market. The mean ACT is over 4 points lower and the mean proficiency rates on state assessments are about 20% lower in majority minority districts compared to predominantly white districts in the same labor market.

These are striking disparities. And in Illinois, unlike many other states, state policymakers have applied no financial leverage to attempt to resolve these disparities.  No harm no foul? doubtful!