Money matters: teachers in the public and private sectors

The public personnel system, particularly the compensation system, has long faced many criticisms such as inflexibility and un-competitiveness when compared to other sectors. This is especially true for compensation systems for K-12 teachers, who also care about public service values, even if they work in the non-public sectors. We examine wage competition for teachers between the three K-12 sectors within metropolitan market areas, even with controls for many other variables. While the public sector is clearly the dominant (but not monopsonist) buyer, it also responds to wage competitions from the other two sectors.