Thursday, March 10, 2011

The Meaning of Overpaid

"Teachers, as a class, can't be underpaid, because the salaries they earn were ipso facto adequate to attract them to do the job. You're defining the issue of the social value of the work out of the question. For instance, in December, as Planet Money reported, economist Eric Hanushek published  a paper for the NBER finding that:
'A teacher one standard deviation above the mean effectiveness annually generates marginal gains of over $400,000 in present value of student future earnings with a class size of 20 and proportionately higher with larger class sizes.'
From society's point of view, one might conclude that teachers are seriously underpaid."