Private School Competition Brings Higher Teacher Salaries

Published May 1, 1999

… Higher Salaries for Public School Teachers

Although teacher unions consistently and vigorously oppose public policy measures that increase the proportion of students attending private schools, research by Ohio University economists Richard Vedder and Joshua Hall shows that such opposition is not in the best interests of union members. Increased competition between public and private schools, they find, leads to higher salaries for public school teachers.

“It may be that union members disregard the interests of their members in trying to maximize union size and power,” note Vedder and Hall in a forthcoming article for the Journal of Labor Research, recently summarized in a Policy Note from Dayton-based Buckeye Institute for Public Policy Solutions.

Examining data from over 600 Ohio school districts, the authors found that when viable private school alternatives exist, competition between the private and public schools increases the salaries of public school teachers by as much as 5 percent. Their state-level results are consistent with the national-level findings of Harvard University’s Caroline Hoxby, who came to a similar conclusion regarding the relationship between competition and salaries.

“Public schools that face more private school competition react by reallocating their given per-pupil spending towards teacher salaries,” reported Hoxby in a 1994 working paper. “We may speculate that competition induces public schools to allot their funds toward more productive uses.”

For more information …

A summary of Richard Vedder and Joshua Hall’s research is available as a March 1999 Policy Note, “Private School Competition Raises Salaries of Public School Teachers,” from The Buckeye Institute for Public Policy Solutions, 131 North Ludlow Street #317, Dayton, OH 45402, phone 937/224-8457.

. . . Better Public Schools

Opponents of school choice frequently claim that competition in education will diminish the quality of education in public schools. But a new study of Ohio school data refutes the claims of opponents and shows that the more competition there is in a school district, the better the public school students performs. Ohio University researchers Richard Vedder and Joshua Hall find a positive relationship between private school enrollment and public school performance.

For example, an increase in the percentage of private school students in a school district from zero to 25 percent would increase the percentage of students passing the fourth-grade proficiency test by almost 6 percent. The Vedder/Hall research confirms work conducted by Harvard University economist Caroline Hoxby, who noted a positive relationship between the number of school districts in a county–a measure of a school’s competitive environment–and student achievement.

Significantly, competition in low-spending districts improves student performance more than competition in high-spending districts. A 25 percent increase in private school enrollment would increase public school performance on the ninth-grade proficiency exam by:

  • 4.1 percent in low-spending districts;
  • 2.8 percent in an average district; and
  • 0 percent in a high-spending district.

The finding is of enormous importance to Ohioans, currently under a state judge’s order to spend more on education and to equalize spending between districts. (See “Equalized Funding Roils Ohio and New Hampshire,” School Reform News, April 1999.) “[Our conclusions] seem to question the effectiveness of that strategy,” say Vedder and Hall.

. . . Unionization of Private Schools

With major school choice proposals under consideration in Florida, Texas, Pennsylvania, and Arizona, vouchers are increasingly likely to be an important part of the education system of the future. While unions are not giving up the fight against vouchers, evidence is accumulating that organized labor is far ahead of the school choice movement in planning the follow_up campaign for operating in a world with vouchers.

Last November, the Education Intelligence Agency noted: “Should school choice become a reality on a large scale, religiously affiliated schools will likely see a great expansion in funding and new personnel. This could lead to demands for higher wages and better working conditions, and a more promising environment for unionization than currently exists in those schools.”

Indeed, the unions are already adjusting to the realities of a post-voucher world:

  • The Public Affairs Research Council of Louisiana endorsed a pilot voucher program for the state at its annual meeting. Asked to comment on the plan, Fred Skelton, president of the Louisiana Federation of Teachers, said “if they want private schools, we’ll just have to organize the private school teachers.”
  • The New Jersey Education Association’s Delegate Assembly voted to “conduct an aggressive campaign to gain control and oversight over any school choice program and to seek charter school legislation which requires maximum oversight and democratic control comparable to existing public schools.”
  • One of the stated goals of Education Florida, the proposed merged teacher union in that state, is to organize employees of charter and private schools.
  • Fresh from negotiating a 22 percent raise and increased benefits over three years, the Association of Catholic Elementary Educators is continuing its push for a greater voice in the Archdiocese of St. Louis. The 1,500_member union wants to establish a grievance process and urges the diocese to publish a handbook that spells out teachers’ rights and responsibilities.

George A. Clowes is managing editor of School Reform News.