Year of Publication



Martin School of Public Policy and Administration

Executive Summary

Teacher effectiveness is an often examined topic in our educational policy arena today, especially when it comes to its effects on student outcomes. Teachers are often considered one of the most important factors in affecting student outcomes. Because the quality of teachers attracted to the teaching profession is presumed to be influenced by their compensation, we are interested in measuring how teacher compensation and student outcomes are related. This study will examine not only current compensation, but include pension compensation as well. By combining both current salaries and pension payments as a unit for total compensation, this paper will examine the effects of total teacher compensation on student outcomes. While not the main goal of this paper, the discussion will include an examination of locales, as defined by the NCES, and The Federal classification of Appalachian Counties to further the spectrum of this analysis.

This paper examines these questions examining panel data for county school districts in the state of Kentucky. The data is from The Kentucky Teachers Retirement System (KTRS), Kentucky Department of Education (KDE), and the National Center for Education Statistics (NCES) from the years 2008-2013. The data from the KTRS is obtained on a county basis, while the data from both the KDE and NCES are at the district level. This is obviously not perfect, but it is what is available. For those counties with two or more districts, the county district is always used. A model is then used to answer the research question of this paper; consisting of various variables responsible for school characteristics, district locale, year, and test scores.

The paper finds that while both compensations (controlled for inflation) and average composite ACT scores have risen over the examined time period, this trend is spurious and is not causational. While this may not be the case nationwide, the analysis has shown that in the state of Kentucky, increased compensation is not increasing test scores on a district level. This paper does find that the number of board certified teachers are useful in increasing test scores for the districts. Policies focused on attracting these individuals may be a worthwhile undertaking for the state of Kentucky.