How to Defuse the Tension Between Radicalism and Utilitarianism Toward Regulating Teachers’ Salary in China

• In Event: Educational Research for Revealing Conflicts Derived From Different Ideologies in China

Abstract

Nationally uniform teachers’ pay scale issued in 2006 has been criticized severely in recent years for its’ lacking of increment mechanism to keep pace with economic development and soaring CPI. Adjustment of this pay scale gains common ground in public, while opinions towards adjusting approaches diverge between radicalism and utilitarianism. On the radicalism side, an extremely equality approach is proposed to have an across-the-board pay increase, which sounds inspiring and corresponds to more equal distribution of qualified teachers. On contrast, utilitarian contends that geographic wage variation derived from factors such as economic growth, living cost and local government’s fiscal capacity are reasonable and should be incorporated formally into salary system. Education research aims to provide a stronger evidence base to facilitate policy making and discuss the transaction costs of the two policy approaches. Two questions are then addressed. How large is the geographical teacher salary variation and where does the variation originate from? And how this variation and its composition affect the transaction cost of the two institutional approaches?
This research is guided by comparative institutional analysis. There are various approaches to institutional changes and their transaction costs differ. Clarifying transaction cost of each and comparison among them are the focus in this analysis.
Quantitative analysis is employed here to determine the provincial teacher salary variation and its composition. Then a comparative analysis on transaction costs of the two policy approaches will be presented based on quantitative analysis results. Statistical data from China Labor Statistical Yearbook, Educational Statistics Yearbook of China, and the website of Statistical Bureau is used in quantitative analysis.
The quantitative analysis shows that salary variation among provinces is significant and determined by non-budgetary items although the uniform teachers’ pay scale exists in China. In further analysis, provincial economic variables are found to be a significant predicator of the geographical salary variation. A discussion followed argues that while radicals may keep salary equality on the surface, variation still exists in the form of non-budgetary pay, which is out of government regulation and cannot be accounted in budget. On the other hand, institutionalizing non-budgetary pay will uncover geographical wage variation and shatter the public’s belief in education equality. A compromised solution should be found by weighting between the progress of institutions and the public’s tolerance of variation.
This research reveals the conflicts between radicalism and utilitarianism in institutional choices in China, which is a representative case of developing countries that are experiencing fundamental institutions formulating. It also clarifies the transaction costs behind different institutional approaches and help the society in large to make institutional arrangements more rationally out of compromises and common beliefs.

Authors

• Yi Long, Monash University

• Ying Zhao, University of North Carolina - Chapel Hill