Can public schools buy better-qualified teachers?

Since the early 1980s, real teacher salaries in U.S. public schools have increased considerably faster than salaries of other Americans with similar levels of education and training. Providing an important impetus for this development were claims that increased salaries would allow the recruitment of better-qualified teachers. This analysis, which uses panel data on new teachers in 188 public school districts that changed their salaries between 1987-88 and 1993-94, investigates whether a school district can, by unilaterally increasing teacher salaries, improve the quality of the teachers it hires, as indicated by their having graduated from selective colleges and majored in the specific subject matter they teach. For nonunion school districts, the author finds a positive, statistically significant relationship between a given district's teacher salaries and that district's probability of hiring well-qualified teachers. Several tests indicate that this relationship is not found in unionized school districts.