The Education School Master’s Degree Factory

One of the most straightforward ways school districts can obtain cost savings without harming students is to eliminate extra pay for teachers who earn a master’s degree. Simply by giving up the extra payment for the master’s degree, school districts in Florida could save better than 3 percent of their teaching personnel costs without losing any of their classroom effectiveness. In a paper just published in the Economics of Education Review, Matthew Chingos and I look at the characteristics of effective 4th through 8th grade teachers in Florida over the period 2002 to 2010.

We found that teachers with an M. A. degree were no more effective, on average, than teachers who lacked such a degree.  Further, we found out that it did not make any difference from which public university in Florida a teacher had earned the degree.  None of them had an educational program that correlated with a teacher’s classroom effectiveness.

Yet a teacher who has taught for 10 years will earn 6.5 percent more (or about $2500), if he or she has collected that extra diploma.  Since about half the teachers have pursued that advanced degree—given the extra dollars, why not?—the state could save better than 3 percent of its teaching personnel costs by eliminating this useless feature of the teacher compensation scheme.

Even pension costs could be reduced, as teachers’ pensions are generally set at the level they earned in the last few years of teaching. For that reason, some teachers take the time to get a master’s degree just before they retire.  I do not fault the teachers, just the silly compensation system that provokes such choices.

Since the state subsidizes the master’s degree training programs by offering them to teachers at a tuition that is lower than cost, even more money can be saved. If the extra compensation for the master’s degree were eliminated, the only people pursuing such a degree would be those seriously interested in obtaining that additional education for its own sake.  Enrollments in schools of education would plummet, and the taxpayer would not have to pony up additional dollars to keep alive programs of dubious value.

Nor is the situation confined to Florida.  Most every school district pays extra for a master’s degree, and all the state-of-the-art research on this subject is finding exactly what we found in Florida.

The extra pay for the master’s degree is an accident of collective bargaining history.  At one time, high school teachers were paid more than elementary school teachers.  When collective bargaining came along, it was decided—to keep all workers on the same pay scale, a primary union objective–to pay all teachers the same, except for experience and credentials. Since high school teachers were more likely to have a master’s degree, they agreed to this arrangement.  Al Shanker led the way in New York City, as I explain in my book, Saving Schools. Subsequently, elementary school teachers, seeing the financial benefits of holding such a degree, have caught up, and they are just about as likely to hold that advanced degree as their high school counterparts.

– Paul E. Peterson

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