In this District Trendline, we focus on one of education’s most persistent examples of ineffective and inefficient spending—automatic salary increases for teachers who hold a master’s degree (i.e., master’s degree premiums). Drawing on data from our Teacher Contract Database, we examine master’s degree premiums across four areas:
- State policy landscape: how state mandates influence district implementation of master’s degree premiums.
- Longitudinal trends: changes in the average master’s degree premium through time.
- District policy landscape: how master’s degree premium structures and costs vary across districts.
- Opportunity cost: the financial investment required from districts to pay for master’s degree premiums—and what they’re giving up in exchange.
Education leaders must think strategically and spend district funds efficiently and effectively—maximizing outcomes per dollar invested, not spending the least amount possible. Savvy district leaders can use financial pressure as a catalyst to eliminate inefficient practices that have gone unchecked, like investing in a compensation structure that has no clear goals or return on investment.1
This isn’t to suggest that investing in teachers is unimportant—quite the opposite. Teacher compensation is the largest educational expense,2and rightfully so as they are the most critical within-school factor affecting student achievement.3 Yet many districts allocate these substantial resources without any systematic approach to ensure that students benefit. We find that 90% of large school districts pay teachers more for master’s degrees, and nearly a third of states require districts to, despite the evidence that master’s degree premiums are bad policy for almost everyone: