Skip over navigation

Journal Issue: Excellence in the Classroom Volume 17 Number 1 Spring 2007

Teacher Labor Markets in Developed Countries
Authors: Helen F. Ladd

Salary Structures, Working Conditions, and Teacher Attrition

A teacher’s decision to enter or remain in teaching depends not only on his or her initial salary but also on the expected growth in that salary over time. A key question is what a potential teacher could expect to earn over his or her lifetime as a teacher compared with other occupations. To the extent that the potential for salaries to increase with experience in teaching is lower than it is in competing occupations, teachers might be tempted to switch jobs or to retire earlier than their counterparts in other occupations.

Salary structures vary widely across OECD countries. For teachers at the lower secondary level, the top salary exceeds the entering salary by only 10 to 20 percent in Denmark, Finland, and Norway but by more than 130 percent in Japan, Portugal, and Korea. Germany, which along with Japan and Korea has high average salaries, has a relatively narrow salary range of only 38 percent. The high starting salaries thus grow relatively little as teachers gain experience. By comparison, top salaries in the United States exceed entrylevel salaries, on average, by about 73 percent.19 National policies also vary with respect to how long it takes a teacher to reach the top salary. In England and Scotland it takes only six years, compared with more than thirty years in eight countries, including France, Korea, and Spain.20

One model of teacher salary progression, as exemplified by Germany, is high starting salaries with relatively rapid growth to a salary plateau. That model is presumably most attractive to those who are willing to make a substantial initial commitment to teaching, as is required by the German system of initial teacher preparation (see below), but may not succeed in keeping teachers in the profession until the normal retirement age. Not surprisingly, the average retirement age for teachers in Germany is only 59, far below 65, the age for retirement with full benefits.21 In 2001, only 6 percent of German teachers worked until age 65.22 Korea exemplifies a second model, in which salaries start low but climb steadily over a long period. That model is presumably less attractive to teachers who are unsure about whether they wish to become a lifetime teacher, but it may succeed in retaining teachers as they age. In yet a third model, exemplified by England, salaries start relatively low but then rise quite rapidly to a plateau. That model is associated with the most severe challenges of retaining teachers.

A prospective teacher’s decision to enter, or the decision later to stay in, the teaching profession also depends on how a country’s salary structure for teachers compares with those in competing occupations—and thus how lifetime earnings compare across professions. Careful analysis of salaries over time in England, for example, finds that the expected lifetime earnings of both men and women in teaching have been declining relative to lifetime earnings of professionals in other occupations. For women in England, teaching nevertheless remains a relatively attractive career, while for men the lifetime return from teaching relative to other occupations is negative.23 That negative return could well explain why men have increasingly been leaving teaching in England.24 The departure of male teachers is of particular concern because men are overrepresented both in high schools, which are more subject to teacher shortages than primary schools, and in the shortage areas of science and math.

To counter the effects of having relatively low top salaries (only 46 percent higher than the entry salaries) that are reached at a relatively young age, England has introduced two new salary-related programs within the past ten years to retain effective teachers.

Since 2000, England and Wales have had a program that resembles National Board Certification in the United States. The program gives teachers the option of being assessed against national criteria for teaching effectiveness when they reach the top of the standard pay scale. Those who pass the assessment gain access to significantly higher pay. Unlike the more restrictive U.S. program, more than 230,000 U.K. teachers, or 80 percent of those who were eligible, applied in the first year, and 97 percent of them passed.25 Critics argue that the process is too time-consuming, both for the applicants and for the head teachers (that is, school principals) who do the evaluation. And no evidence to date shows that the program improves teacher quality and student achievement, though that fact is not surprising because passing the threshold requires evidence of successful past, rather than current, performance. The program does, however, indicate a strong interest among teachers in higher pay and gives successful teachers access to an “upper pay scale” that offers performance pay.

Teachers in England can also increase their pay by becoming an Advanced Skills Teacher (AST). This option, introduced in 1998, keeps teachers in the classroom by allowing them to augment the top salary by up to 40 percent. Teachers can apply at any stage in their career and must pass an AST assessment based on an externally evaluated portfolio. They then typically spend up to 20 percent of their time providing support to other teachers. The hope is that ultimately ASTs will make up about 5 percent of the workforce.26

Such programs are not unique to England. Other OECD countries have also searched for ways to diversify a “flat” career structure that offers only limited options outside the classroom as well as limited opportunities for promotion and career diversification. A common approach is to provide opportunities for established teachers to mentor young teachers. In addition, many countries are shifting more management authority to the school level and creating new roles for teachers, including a variety of “middle management” positions such as departmental heads, team leaders, or management or curriculum development personnel. Typically these positions bring with them higher pay and reduced classroom teaching hours.27 Nonetheless, opportunities for roles outside the classroom remain quite limited. In 2001, on average, only about 5 percent of staff positions in upper secondary schools across fourteen OECD countries were classified as management and 4 percent as professional development.28

Attrition and Nonsalary Considerations
Teachers in England leave the profession at far higher rates than those in many other developed countries, including the United States, where teacher attrition rates increased from 5.1 percent in the early 1990s to 7.4 percent in the late 1990s. In England the rate of attrition rose from 8 percent to 10 percent between 1999–2000 and 2001–02.29 By contrast, in Italy, Japan, and Korea departure rates are less than 3 percent.30 Part of the explanation for England’s higher attrition rates is undoubtedly the salary structure, but concerns about salary are not the sole explanation.

Indeed, in a 2002 survey of more than 1,000 departing teachers in England, 45 percent of respondents cited the heavy workload, 36 percent cited government initiatives, and 35 percent cited stress as the most important reasons for leaving the profession.31 Only 11 percent cited low salaries. Concerns about workloads and government initiatives were particularly prevalent among those leaving primary schools, where low ratios of teachers to pupils and the government’s drive to promote literacy and numeracy have put a significant burden on teachers. Many teachers, especially older ones, appeared to be increasingly frustrated with the administrative duties associated with new government initiatives, including school testing reports and the stress of meeting performance thresholds. Although some teachers said that higher salaries might have compensated them for these heavier workloads, more than 40 percent said that nothing could induce them to stay.32

Concern about work-related stress is also evident in a recent study of teacher supply in Sweden, where the share of teachers suffering mental stress rose from 5.3 percent in 1991 to 21.1 percent in 2002, an increase far exceeding that for all Swedish employees or for white-collar workers. One plausible explanation for the rising stress among teachers is the deterioration in working conditions associated with a continuous fall in the ratio of teachers to pupils during the 1990s.33

The lesson for the United States is that government policies that put significant new pressure on teachers could increase departures from the profession. Further, both in the United States and internationally, it is likely to be the more qualified teachers who leave.34

Strategies to Retain Teachers
Nonsalary policies used by various OECD countries to try to retain effective teachers include providing additional support staff for teachers, recognizing and celebrating effective teachers, improving school leadership, and reducing teacher burnout through parttime work, sabbaticals, and extended leaves.35 Some of these efforts appear to be useful, at least for some teachers and in some countries.