Teacher Salaries and Teacher Unions: A Spatial Econometric Approach

The author uses a spatial econometric framework to examine the determinants of teacher salaries in the United States, including union activity in the teachers’ own and in neighboring districts, teacher salaries in nearby districts, and other school district characteristics such as size and student-teacher ratios. Using the 1999–2000 Schools and Staffing Survey as well as the School District Demographic System and Bureau of Labor Statistics data sets, he finds that union activity increases salaries for experienced teachers by as much as 18 to 28%; it increases salaries for beginning teachers, however, by considerably less. Results also confirm that salaries for experienced and beginning teachers are positively affected by the salaries of teachers in nearby districts. A one-percent increase in the distance-weighted average of teacher salaries in nearby districts increases salaries in a given district by 0.52% for experienced teachers and 0.66% for beginning teachers. Studies that ignore such spatial dependence are likely to be mis-specified and may lead to misleading conclusions