In theory, public sector workers like teachers accept lower current salaries in exchange for better benefits like health care and pensions. But a new paper suggests that a common perception about how we pay public sector workers is fundamentally flawed.
A new National Bureau of Economic Research paper from Maria Fitzpatrick examines a real-life choice offered to Illinois teachers in the 1990s. The state offered late-career teachers a chance to upgrade their benefit at a very discounted rate. Based on their responses and take-up rates, they actually valued the pension at only about 20 cents on the dollar. In other words, they’d prefer to have $2 in current wages over $10 in pension wealth (adjusted for today’s dollars). Taxpayers and employers have to pay the full cost of the benefit, but, because the true costs are hidden, teachers don’t value them fully.
This is a bit like a Christmas gift from your Great-Aunt Mildred. She may have spent $50 on a dandy argyle sweater, but you might only think it’s worth $10. (This isn’t just a silly abstract example; economists have documented that this “deadweight loss” actually happens.)
In this metaphor, teacher pensions are like the sweater: Protective and well-intentioned, but ultimately under-valued and under-appreciated. Teachers would rather just have cash, or at least a nice gift card.
- Chad Aldeman
This first appeared on teacherpensions.org
At one elementary school, the average income is almost $250,000 per year. Is this school really more “public” than an inner-city Catholic school serving poor minority children? The public spends $12,000 per child on the former and $0 per child on the latter. Tell me again why that’s fair?
If the Republicans take the Senate, Senator Lamar Alexander would take the helm of the Senate HELP Committee, which is a big deal.
Before we retreat to the pre-NCLB era of grade-span testing or revert to some other testing-light position, let’s at least recall some of the benefits of annual testing of all kids.
The overheated rhetoric around Common Core elides the fact that it incorporates several fundamentally sound and long-overdue ideas that have gone missing from our schools for decades.
When designing accountability systems, we need to find the sweet spot between defeatism and utopianism. In my view, that’s exactly what the states are trying to do. They deserve our praise, not our derision.
Whatever the requirements are for earning different credentials, however, the true value of a high school diploma is established by the colleges that admit and the employers who hire our high school graduates.
Behind the Headline: Montgomery School Officials Ask for Delay in Using New State Tests for Graduation
In Maryland, where students will take new tests based on the Common Core standards for the first time this year, one school board is asking the state to delay a requirement that students pass the new tests to graduate from high school.
On Monday, the Philadelphia School Reform Commission shocked the city by announcing that it would unilaterally cut health care benefits to city teachers rather than continue to negotiate with the teacher’s union.
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