A new study by Taylor Odle of the University of Wisconsin-Madison and Patrick Lavallee Delgado of the University of Pennsylvania finds that eliminating higher pay for teachers with advanced credentials leads to enrollment declines in education graduate programs and reductions in campuses’ tuition revenue—suggesting that pay increases are a powerful incentive for teachers to pursue advanced degrees. The impacts are most pronounced among public universities with less research-intensive missions.
The authors examine Tennessee, which passed a law in 2010 allowing public school districts to develop their own teacher salary schedules. Thereafter, 27 percent of districts modified their salary schedules to exclude premiums for post-baccalaureate education, including master’s degrees, post-graduate credits, and doctoral degrees. Using data from the U.S. Department of Education’s Integrated Postsecondary Education Data System (IPEDS) from 2006 to 2020, the researchers compared enrollment trends at public universities located in or adjacent to counties where school districts terminated credential wage premiums with trends at institutions in counties that did not implement such reforms.
Odle and Delgado estimate that eliminating additional teacher pay for advanced degrees reduced enrollment in graduate education programs by 27 percent. Large, research-intensive universities classified as R1 institutions (Doctoral Universities with Very High Research Activity per the Carnegie Classification of Institutions of Higher Education) appear largely insulated from these effects, with no consistent evidence of enrollment declines of the same magnitude. Yet less research-intensive institutions experienced statistically significant enrollment declines ranging from 21 to 30 percent.
Even under a conservative assumption that each lost student would have enrolled in just one 3-credit hour course per semester, the enrollment reductions would equate to $3.8 million in lost tuition revenue annually. And the fiscal consequences extend beyond tuition: in 2016, seven of Tennessee’s less research-intensive public universities lost a combined $622,000 in state appropriations due exclusively to declines in master’s and education specialist degrees.