Monetary returns to academic ability in the public teacher labor market

Previous research has established the returns to academic ability in the general labor market, and this paper investigates such returns in the teacher labor market. Using a nationally representative sample of public school teachers, I find that teachers who graduate from the most selective undergraduate institutions have salaries that are between 7% and 14% higher than those who graduate from the least selective colleges. An empirical investigation of the source of these returns reveals that the majority of this difference is due to high-ability teachers sorting into higher paying districts, though a non-trivial amount arises from within-district deviations from the salary schedule.