Paying Economists by Hair Color? Thoughts on Masters Degrees & Teacher Compensation

In previous posts, I’ve conveyed my distaste for the oft obsessively narrow thinking of the traditional labor economist when engaged in education policy research. I’ve picked on the assumption that greed and personal interest are necessarily the sole driving force of all human rational decision making. And I’ve picked on the obsession with narrow and circular validity tests. Yet still, sometimes, I see quotes from researchers I otherwise generally respect, that completely blow my mind.

I gotta say, this quote from Tom Kane of Harvard regarding compensation for teachers holding masters degrees is right up there with the worst of them – most notably because it conveys such an obscenely narrow perspective of compensation policies (public or private sector) and broader complexities of labor market dynamics.

The quote comes to us from the Wall Street Journal the other day:

“Paying teachers on the basis of master’s degrees is equivalent to paying them based on hair color,” said Thomas J. Kane, an economist at the Harvard Graduate School of Education and director for the Center for Education Policy Research. Mr. Kane said decades of research has shown that teachers holding master’s degrees are no more effective at raising student achievement than those with only bachelor’s, except in math. Researchers have also shown that teachers with advanced degrees in science benefit students. (Wall St. Journal)

The broad implication of the quote by Kane is that immediate, measurable differentials  in teacher compensation should only ever be directly associated with characteristics, indicators, behaviors of teachers that can be directly associated with differences in measured student test score differences from time 1 to time 2. Here… and NOW! That’s it. Any and all pay differentials MUST be associated with estimated test score gains on reading and math! The extension of this logic is that if there exists no statistically estimated relationship between a teacher having a masters degree in X, Y or Z and their students test score gains in that or the next year (perhaps), then no compensation should exist for this characteristic. Apparently, the same would apply for the teacher with the additional year of experience if they could not show a marginal gain to their students test scores over what they had previously achieved with less experience.

There are two gaping holes in this logic (setting aside the huge questions of the validity of the test score outcome metric as most important in defining student success and attributing that success to the teacher).

First, the research on “masters” degrees in education has pretty much addressed questions related to whether holding something ambiguously classified as a masters degree is positively associated with test score gains. In fact, these studies have found that holding content area masters degrees in math is associated with gains in math achievement.[1]

BUT, that research has not to my knowledge asked the broader labor market question regarding whether school districts offering additional pay for holding or pursuing masters degrees achieve a recruitment advantage on the labor market for teachers, or any other benefits to their workforce and children they serve. That’s a totally different question and one that requires being able to think beyond the laughably narrow mindset that the ONLY benefit that can ever matter and should ever warrant additional public expenditure is that which contributes directly and immediately to test score gains (of the students with the specific teacher being compensated for their masters degree).

Quite honestly, it’s this same utterly ridiculous thinking that plagues Kane’s Measures of Effective Teaching studies for the Gates Foundation – the assumption pervasive at every step of the project that the one and only valid indicator of teacher quality is value-added itself and all other measures should be evaluated by their ability to predict value added. Because a teacher’s prior year value added is the best predictor of current year value added, and a better predictor than observations, student surveys, etc., therefore value-added is the best measure of teacher effectiveness!

Second, both from a practical perspective and with potential broader labor market implications, there are many, many reasons why a local public school district or private school… or other business entity for that matter might wish to provide additional compensation for their employees who chose to advance their education, either related specifically to their current job title and responsibilities, or not!

It may be entirely reasonable for local public school districts to provide additional compensation for teachers seeking graduate credentials that expand their possible involvement in district or school activities, such as achieving additional training to work with special needs populations, or additional content certifications, or for that matter additional training to engage in all of the new teacher observations Kane and others now seem to think are necessary for getting rid of bad teachers (even though his own work on MET did not support his own conclusion in this regard). That is, you might want to have the salary differential available for the utility player.

It may also be an entirely reasonable approach for school districts to view providing additional compensation for furthering one’s education as a useful tool for retaining teachers – especially those who themselves show interest in expanding their own knowledge/learning.

In both this, and the previous case, the additional degrees or credentials obtained may actually have no direct relationship to the current primary responsibilities of the teacher. Does that mean they are entirely useless? That they should not be in any way associated with differentiated compensation not only until they are used, but until they are used in such a way that we can estimate that the additional credential has led to test score gains?

That’s just freakin’ asinine.

And this reductionist thinking really needs to stop.

A few other points are in order here. As I’ve shown in previous posts, the pursuit of the education masters degree takes many forms and has drifted over years. See the following figures.



Indeed, more creative thinking about how and when we choose to compensate graduate degrees through salary differentials is important to consider. But it would be utterly foolish to consider only immediate contribution to student test score gain as the single valid metric for making this decision.

Also, there already exists some variation in the ways in which masters degrees tend to be compensated across local public school districts. On average, I have found in studying teacher wage data in large diverse metropolitan areas that it is in fact the more affluent suburban districts that a) tend to have larger shares of teachers holding masters degrees and b) tend to provide a bigger bump in salary associated with masters degrees. Here are the New Jersey figures from a few years back.



And in the Chicago metro area, based on prior work, a teacher in a majority minority (student population) district is only 69% as likely as a teacher in a non-majority minority district (in the same labor market and holding other teacher characteristics constant) to hold a master’s degree and a teacher in a district that is 100% minority is only 60% as likely to hold a master’s degree as a teacher in a district that is 0% minority.

This figure displays the salary differentials by degree level and experience:

Slide3Teachers in majority minority districts are much less likely to hold a master’s degree than teachers in other districts in the same labor market. On average, a teacher in a majority minority district – at the same degree level and experience as a teacher in a non-majority minority district – is making about $2,000 less in annual salary. Because a master’s degree “bump” in salary is worth an average of about $8,500 ($8,481) in annual salary, large shares of teachers in majority minority schools are earning over $10,000 less than teachers at comparable experience levels in non-majority minority districts in the same labor market.

So, in other words, if masters degrees are such an obscene inefficiency in our public education system, they are an inefficiency most among the affluent suburban districts and less so in major urban districts (it is actually common to find that financially less constrained districts spend less efficiently – at least in terms of direct relationship to measured outcomes).

Meanwhile, the policies endorsed by Kane (via the MET project) are at least implicitly far more focused on fixing the supposed inefficiencies of our major urban education systems.

Perhaps, just perhaps, if those suburban districts next door did not pay such large differentials for and recruit so aggressively the teachers with masters degrees, their urban neighbors might have a chance to recruit some of those same teachers. But in the current environment, pushing urban districts to remove any and all compensating differentials related to anything not tied directly and immediately to test score gains will undoubtedly do far more harm than good.

[1] Goldhaber, D. D., & Brewer, D. J. (1998). When should we reward degrees for teachers?. The Phi Delta Kappan, 80(2), 134-138.


Other articles related to teacher wages and quality

Richard J. Murnane and Randall Olsen (1989) The effects of salaries and opportunity costs on length of state in teaching. Evidence from Michigan. Review of Economics and Statistics 71 (2) 347-352

David N. Figlio (1997) Teacher Salaries and Teacher Quality. Economics Letters 55 267-271. David N. Figlio (2002) Can Public Schools Buy Better-Qualified Teachers?” Industrial and Labor Relations Review 55, 686-699.  Ronald Ferguson (1991) Paying for Public Education: New Evidence on How and Why Money Matters. Harvard Journal on Legislation.  28 (2) 465-498.

Susanna Loeb and Marianne Page (2000) Examining the link between teacher wages and student outcomes: the importance of alternative labor market opportunities and non-pecuniary variation. Review of Economics and Statistics  82, 393-408. Susanna Loeb and Marianne Page (19980 Examining the link between wages and quality in the teacher workforce. Department of Economics, University of California, Davis.

Figlio, D.N., Rueben, K. (2001) Tax Limits and the Qualifications of New Teachers. Journal of Public Economics. April, 49-71

Ondrich, J., Pas, E., Yinger, J. (2008) The Determinants of Teacher Attrition in Upstate New York. Public Finance Review 36 (1) 112-144


10 thoughts on “Paying Economists by Hair Color? Thoughts on Masters Degrees & Teacher Compensation

  1. It is idiotic comments like those from Tom Kane that are fueling the corporate reformers. In NJ, Teachers cannot receive pay increases for course work outside their Teaching area.

    The affect of this will be that there will be fewer Teachers seeking advanced degrees in Administration or Guidance, which means that these positions will have to be filled by people without previous teaching experience!

    1. Actually … I think it’s the corporate reformers who are fueling comments like this by Tom Kane and media like Wall Street Journal.

  2. In engineering, not only do employers often want master’s degrees, but they are often willing to pay full tuition and pay the employee full time while the degree is in progress. Employers pay to send them to conferences on the employer’s time and the employer’s dime. In teaching, you have to do this all on your own – paying tuition and finding the time.

    It’s my observation that being a student is itself a valuable exercise for a teacher, especially a teacher who has been out in the field for a while.

  3. Your early comment that not paying for Master’s Degrees equates to not paying for experience brings up the issue of experience based pay scales. If these academics believe that neither a Master’s Degree nor experience makes for a value added result, then why pay people less than the top salary? All of the salary “steps” (and I have worked in districts with as many as 22) are in effect denials of full pay because one does not have enough experience. If experience is not a VA factor, should not all teachers receive top pay?

  4. “setting aside the huge questions of the validity of the test score outcome metric as most important in defining student success and attributing that success to the teacher”

    Well, it is unethical to use the results of any test, standardized or not, for anything other than what the test was designed, so that a test designed to assess a student’s fifth grade math abilities cannot ethically be used to say anything about the teacher’s abilities as it was not designed to assess that ability.

    That unethical concept is not that difficult to understand, but it is hardly ever adhered to in the standardized testing accountability regimes.

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