Texas ESAs Would Increase Teacher Pay, Study Finds

Published May 16, 2017

ESAs grant parents access to a portion of the money allocated for their child’s public education to use on educational alternatives, such as private school tuition, homeschooling textbooks, tutoring, and learning therapies.

Texas currently has no education choice programs. The Texas Senate voted in late March to approve Senate Bill 3, legislation to establish ESAs and a tax-credit scholarship program. In April, the House blocked SB 3 by approving an amendment to the Senate budget to prohibit public funds from “[paying for or supporting] a school voucher, education savings account, or tax credit scholarship program, or a similar program through which a child may use state money for nonpublic education.”

Teacher Pay Could Increase

According to the study, titled “The Effects of Education Savings Accounts (ESAs) on Teacher Pay in Texas,” “Our estimates of the effects of education freedom through education savings accounts (ESAs) in its inaugural year in Texas indicate that teacher pay could substantially increase, with some teachers receiving as much as $28,000 more per year.”

The study was published in March by the Texas Public Policy Foundation.

“Advancing education freedom through ESAs will affect teacher pay primarily by: 1) Influencing budgets of public school districts and private schools, and 2) Increasing competition in teacher labor markets while perhaps reducing bureaucratic inefficiencies,” the study states.

Student and Teacher Benefits

Study coauthor Vance Ginn, an economist at the Texas Public Policy Foundation, says even teachers unions should support ESAs.

“There’s been a lot of talk that says ESAs will take money away from public schools and this will hurt teacher pay over time,” Ginn said. “[Study co-author] John Merrifield has been working on this issue for years and developed the school choice fiscal calculator so we can look at a state’s data, put that data in the calculator, and based off historical trends with that data, we can see what we would expect to happen if we put [an] … ESA program in place in Texas in the 2017–18 school year.

“We saw [teacher pay] was something that’s been missing in this research, so we said, let’s study that,” Ginn said. “From a public policy and political economy standpoint, teacher unions are fighting school choice the most. There’s a gap in the research, and if you can show teachers who are fighting against this that teachers will benefit from this program, it is more palatable to them. There would be money following the students and benefitting teachers in the process.”

‘More Negotiating Power’

Ginn says competition could have a huge, positive impact on schools and their employees.

“Allowing the opening up of that marketplace would give [teachers] more negotiating power and power to negotiate these higher wages,” Ginn said. “Those individuals taking ESA dollars and going to a private school market could increase the revenue to private schools by $1.6 billion. The average public school teacher salary is $51,000. The average private school salary is $41,000. Once you allow for the market to open up, these two salaries would converge.”

‘Teachers Matter a Lot’

Martin Lueken, director of fiscal policy and analysis at EdChoice, says with more freedom, schools could attract higher-quality teachers.

“We know that school quality is dependent on the quality of the workforce,” Lueken said. “Teachers matter a lot. I think that [with] ESAs, by virtue of giving schools more freedom and discretion in realigning incentives, schools, especially public schools, may be spurred to rethink how they operate or do some things, such as compensate and hire their teachers. I think school choice can be a mechanism to get to that point.”

Public School Benefits

Like public school educators, public schools would benefit by ESAs, Ginn says.

“A lot of maintenance and operation dollars stay at the public school,” Ginn said. “They no longer have the cost but still keep some [funding] in spite of no longer having to serve the students.”

Lueken says school choice can provide much-needed options.

“It’s important to acknowledge that school choice mechanisms are a necessary part of the answer and solution to a lot of the challenges that we face in K–12 education and a way to free up resources and provide flexibility for local officials on how they control how they use their resources,” Lueken said.

Ashley Bateman ([email protected]) writes from Alexandria, Virginia. 


Vance Ginn and John Merrifield, “The Effects of Education Savings Accounts (ESAs) on Teacher Pay in Texas,” Texas Public Policy Foundation, March 2017: https://heartland.org/publications-resources/publications/the-effects-of-education-savings-accounts-esas-on-teacher-pay-in-texas