Wednesday, March 30, 2011

The Public Sector Premium for School Principals

Principals in private and public elementary and secondary schools.
Average Salaries, 2007-2008
AgePublicPrivatePublic Premium
  Under 40$80,600$47,30070.40%
  40 to 44$84,900$54,80054.93%
  45 to 49 $86,000$55,00056.36%
  50 to 54$88,100$59,50048.07%
  55 or over $91,500$63,70043.64%
Average $86,900$58,30049.06%

In a recent CD post, I featured the public sector premium for full-time elementary and secondary school teachers, which ranges from 14% to 102%, depending on experience and education.  The chart above is based on Department of Education data for the salaries of private and public school principals in 2007-2008 based on age.  Compared to public school principals in the age groups above, private school principals have slightly more experience as principals, slightly less experience as teachers, and are less likely to have advanced degrees (Master's or Doctor's degrees).  So the age group categories above don't control perfectly for education and experience, but still show huge premiums for public school principals of 43% or higher, with an overall average premium of 49%.

Here's one comparison:

Private school principals in the oldest age group "55 or over" have 18.6 years teaching experience on average, 15.4 years experience as principal, and 9.4% have Doctor's degrees.  Public school principals in the youngest age group of "under 40" have 2.9 years experience as principal on average, 7.6 years teaching experience, and 6% have Doctor's degrees.  

And yet the public school principals in the youngest age group with the least experience make $80,600 on average, compared to the private school principals in the oldest age group with the most experience who make $63,700 on average, which represents a 26.5% public sector premium.


At 3/31/2011 12:14 AM, Blogger PeakTrader said...

A bachelor's degree or less is sufficient to teach students in elementary and secondary schools.

Students at the pre-college level basically need to learn only the fundamentals of english, math, science, history, etc.

Although, I'd require economics, money management, human and professional development, etc., and hire teachers with some real work experience.

Music, arts & crafts, nutrition, more P.E., etc. can be added after replacing overpaid and overeducated teachers, who should be teaching at the college level.

At 3/31/2011 2:07 AM, Blogger PeakTrader said...

Public Education Finances 2008
Issued June 2010
U.S. Census Bureau

U.S. Elementary-Secondary Per Pupil Spending 2007-08 (school year): $10,259

At 3/31/2011 4:25 AM, Blogger juandos said...

Hmmm, reminds me of this posting: Private School Tuition: 1/3 to 1/2 Less Than Publics...:-)

Note the following from the Cato Foundation study: To put public school spending in perspective, we compare it to estimated total expenditures in local private schools. We find that, in the areas studied, public schools are spending 93 percent more than the estimated median private school...

At 3/31/2011 5:38 AM, Blogger geoih said...

For all the whining about teachers' unions, it's the administrators of public schools that are the real obstacle to real reform. The teachers are the biggest single cost to public schools, but it's that way with any industry where there is very little capital cost and massive labor cost (e.g., software programming, janitorial services, etc.). But it's the high (over) paid administators that have no interest in changing the present system. They are more than happy to play both sides of the field, giving the unions what they want during boom times and pointing their fingers at the huge labor costs during the lean times.

The problem isn't the education producers, it's the education managers. They've created a giant rent seeking machine that doesn't produce.

At 3/31/2011 7:07 AM, Blogger Frozen in the North said...

I don't know, but my guess is that if I had the same pay, and had to choose between a nice prep school with involved parents and no guns and a public schools with gangs and single parent families, and a militant teachers union. I would pick the private school.. but that just me.

MY gut feeling is that the pressures of being a principal in a public school must be much more stressful.

BTW interesting that older principals with higher experience and higher professional proficiency would pick lower pay... in private school, are they stupid or is this some kind of trend?

At 3/31/2011 8:11 AM, Blogger PeakTrader said...

Frozen in the North, you may fit in at some schools better than others, while another teacher fits in better at other schools.

Anyway, it's easier to teach a student something who knows less.

It's ridiculous that many students finish 12 years of school without learning how to read.

Also, a private school principal may not be able to get a public school principal job at higher pay.

At 3/31/2011 9:07 AM, Blogger Sean said...

As geoih said,
teachers I know who have chosen to work in private schools don't look back. The ability to raise standards of behavior and reject problem students creates a climate well worth the pay differential in the opinion of many faced with such a choice.

At 3/31/2011 11:01 AM, Blogger Buddy R Pacifico said...

Principals in the Seattle School District make between $100-125,000 per year and are covered by a collective bargaining agreement. Some Seattle schools have two principals and the central administration is laden with ex principals in nebulous positions -- because it is impossible to fire based on incomptency.

Seattle School's principals can earn up to $37,000 in annual bonus money under their new contract. Some of the new bonus money can be earned in just one year, but carry over the life of employment!

At 3/31/2011 2:28 PM, Anonymous Anonymous said...

Frozen in the North nails it, public schools and private schools are not directly comparable. Public school employees work in worse environments, and are paid more. Private school employees sacrifice some pay to teach in a better environment.

You also should control for religious teachers, who may be accepting the lower pay as for of service to the church. When I interviewed at a religious school, those are the terms they used to justify their 25k/yr salary offer.

At 3/31/2011 2:41 PM, Blogger PeakTrader said...

Michael, how do you know public school employees are paid more at the worst public schools than the best public schools?

How Much Are Public School Teachers Paid?
January 2007

BLS data

Compared with public school teachers, editors and reporters earn 24% less; architects, 11% less; psychologists, 9% less; chemists, 5% less; mechanical engineers, 6% less; and economists, 1% less.

Full-time public school teachers work on average 36.5 hours per week during weeks that they are working. By comparison, white-collar workers (excluding sales) work 39.4 hours...Private school teachers work 38.3 hours per week.

At 3/31/2011 6:28 PM, Blogger Viajero said...

Yeah, but controlling for religious affiliation would eliminate more than 3/4ths of the sample for private education.

Probably not a worry as there is no way that the fact that 3/4ths of the private schools in America are religious could drag wages down, could it?

At 4/01/2011 2:42 AM, Blogger PeakTrader said...

The data show students in private schools perform better or learn more than students in public schools.

At 4/01/2011 7:07 AM, Blogger geoih said...

Quote from Frozen in the North: "BTW interesting that older principals with higher experience and higher professional proficiency would pick lower pay... in private school, are they stupid or is this some kind of trend?"

Perhaps getting the high paying job in a public school has less to do with a person's proficiency and more to do with something else (e.g., political connections).

At 4/04/2011 9:38 AM, Blogger katardin28 said...

So far we've compared the working conditions between public and private schools as a factor that could explain some of the difference in pay, but what about size? If you're a CEO of a large company, you're paid more than the CEO of a small company because you have a larger responsibility to manage. I would therefore question to what extent are public schools generally larger than private schools.

In my experience public schools are much, much larger than private schools. As such, there may be an economic basis for the discrepancy that isn't being controlled for. I would be curious if anyone has done a study controlling for school size.


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