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Beyond the Paycheck: How Teacher Salaries Influence Graduation Outcomes

Analysis performed by Learner with data from the last 10 years shows positive correlation between teacher salaries and graduation rates across the US
Beyond the Paycheck: How Teacher Salaries Influence Graduation Outcomes
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At Learner, we are passionate about teaching and the value of education. We believe that teachers have a valuable impact on students, and therefore should be compensated accordingly. In fact, low pay is an important factor causing current teacher shortages.

So we asked ourselves a question: is there a correlation between higher teacher salaries and higher graduation rates? The short answer is yes — and we’ve got the numbers to show it.

Data shows there’s a very high correlation between teacher salaries and graduation rates.

Correlation by State

We wanted to dig deeper and see if this correlation stands true at a more granular level, namely, within individual states. We took it upon ourselves to examine data from all 50 U.S. states, including the District of Columbia, to see if we could find the same correlation.

We found that higher teacher salaries are correlated with increases in graduation rates for 46 states. This further supports our theory that higher teacher salaries can have a positive effect on graduation rates.

Check our interactive dashboard for charts and data for each individual state!

Does that mean that states where teachers are paid the most have the highest graduation rates?

Not exactly — there are several other factors that could explain why states that pay teachers the most are not necessarily the states with highest graduation rates. Now that we’ve discovered evidence supporting teacher salary correlation with graduation rates, we plan to explore further to find out what other factors impact graduation rates.

For example, the cost of living in certain states may drive higher teacher salaries, which may not necessarily translate to better educational outcomes as the higher nominal salaries might only be compensating for higher living costs. 

Secondly, the allocation of educational funds within a state can also impact graduation rates; even with higher teacher salaries, if the funds are not well-distributed or if essential resources and support services are lacking, graduation rates may not improve. 

Thirdly, state education policies, curriculum standards, and graduation requirements can influence graduation rates independently of teacher salaries, reflecting the varying educational landscapes across different states. For example, during the COVID-19 pandemic, some states waived exam requirements for graduation, which naturally drove higher graduation rates.

Lastly, the level of community and parental support can play a crucial role in students' academic success and, consequently, graduation rates. The interplay of these factors explains why we can’t compare teacher salaries and graduation rates across different states.

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Teacher Shortages

The U.S. is facing a significant teacher shortage crisis, with an average of three unfilled teaching positions per school, leaving over 200,000 classrooms without qualified educators​​. Contributing factors include a high burnout rate among teachers, with 44% reporting burnout, and a notable attrition rate double that of countries with strong education systems like Finland and Singapore​​. The shortages vary across different subject areas and regions, with states like Florida, Mississippi, and Texas being heavily affected. The situation has been exacerbated by the COVID-19 pandemic and economic challenges, which have led to 55% of educators contemplating an earlier exit from the profession​. This crisis underscores the need for systemic solutions to address teacher retention and recruitment, ensuring a high-quality education for students.

Correlation vs. Causation

When analyzing the relationship between teacher salaries and graduation rates, it's important to distinguish between correlation and causation. A correlation between teacher salaries and graduation rates might suggest that as one variable increases, so does the other. However, correlation doesn’t  prove that higher teacher salaries directly cause higher graduation rates, as there are so many other factors that also impact it.

Establishing causation requires a more rigorous examination, often through controlled experiments or advanced statistical analyses, to rule out other explanatory variables and prove a direct cause-and-effect relationship. Therefore, while a positive correlation between teacher salaries and graduation rates might indicate a need for further investigation, it does not provide conclusive evidence that increasing teacher salaries will definitively lead to higher graduation rates. In educational policy discourse, understanding this distinction is crucial to inform well-rounded, effective strategies aimed at improving student success.


Graduation rates

We used public high school 4-year adjusted cohort graduation rate (ACGR), gathered from the National Center for Education Statistics.

Average salaries

Annual salaries of teachers in public elementary and secondary schools, also gathered from the National Center for Education Statistics

We opted to match teacher salaries with the first year of the graduation rate cohorts, as the conditions at the beginning of the cohort period, including teacher salaries, set the stage for the subsequent years of education.

How we analyzed the data

In order to investigate if there is a correlation between teacher salaries and graduation rates, we used the Pearson correlation coefficient. The Pearson Correlation Coefficient is a statistical measure that quantifies the strength and direction of a linear relationship between two continuous variables. Its value ranges from -1 to 1; a coefficient close to 1 implies a strong positive correlation, meaning as one variable increases, the other also tends to increase. Conversely, a coefficient near -1 indicates a strong negative correlation, suggesting that as one variable increases, the other tends to decrease. A coefficient around zero suggests little to no linear relationship between the variables. This coefficient is denoted by the symbol 'r', and it's a widely used statistic. 

Correlation Values (r) 

  • 0.9 to 1 or -1 to -0.9: Very High Correlation
  • 0.7 to 0.9 or -0.9 to -0.7: High Correlation
  • 0.5 to 0.7 or -0.7 to -0.5: Moderate Correlation
  • 0.3 to 0.5 or -0.5 to -0.3: Low Correlation
  • 0 to 0.3 or 0 to -0.3: Very Low or No Correlation

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About the author:

As the Head of Editorial at Learner, Mathias combines a deep passion for education with creative flair. With a diverse background and a brief stint in full-time parenting, he focuses on delivering inspiring, educational content. When not at work, he can be found knitting, writing books for children and spending time with his family.

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