Leaky Pipes: Exploring the Estimated Economic Impact of Teacher Salary Increases Across Districts

• In Event: AERA Roundtable Session Thursday 3:35 pm Four Seasons Ballroom 4
  In Roundtable Session: Impacts of Policy and Enrollment Changes on School Inputs (Table 12)

Abstract

States across the US are passing legislation to address teacher compensation. While compensation reform is crucial for the recruitment and retention of quality teachers, it also has implications for local communities, as increases in salaries can increase the amount of non-local money being infused into a local economy. This paper shifts the focus from the individual to the community by examining the relationship between teacher salary increases and local economic development. I examine a 2023 teacher compensation policy in Indiana raising minimum teacher salaries to $40,000 (Ind Code § 20-28-9-26) and conduct a series of financial scenarios in all public school districts across Indiana to simulate how changes in salary expenditures from state sources are estimated to impact local economies.

Author

• Kristie LeBeau, Harvard University