Estimating Compensating Wage Differentials for Public School Teachers in High-Poverty and High-Minority Schools: Evidence from U.S. National Data, 1988–2018

October 2025

Using a hedonic wage framework, this paper estimates compensating wage differentials (CWDs) for teachers in high-poverty and/or high-minority schools, drawing on thirty years of nationally representative data from the School and Staffing Surveys (SASS), National Teacher and Principal Survey (NTPS), and Common Core of Data (CCD), 1988–2018. We also examine CWDs for teachers with STEM BA degrees and for rural teachers. Results indicate that salaries reflect positive CWDs in high-minority schools but consistent wage penalties in high-poverty schools. STEM BA teachers, despite generally earning a premium, face an additional 0.11% wage penalty for each 1-percentage-point increase in school poverty and an even larger penalty in rural areas. Rural teachers experience an added 0.07% penalty under the same conditions. These findings highlight enduring disparities in teacher compensation by school demographics, subject specialization, and geography, with implications for addressing teacher shortages in disadvantaged settings.

Keywords

Compensating wage differentials, teacher salaries, hedonic wage model, high-poverty schools, high-minority schools

Education level

K-12 Education

Topics

Teacher and Leader Development