The National Bureau of Economic Research recently completed a study which showed that student test scores in math and reading improved after Illinois teachers were offered the ERI (Early Retirement Incentive) in the 1990’s. The ERI gave teachers with at least 5 years’ experience and at least 50 years of age a free 5 year add-on to their years of service credit encouraging more than 10,000’s of teachers to retire early. This resulted in more than 10,000 of novice teachers to be hired as replacements.
The net effect of the ERI was to transfer costs from the local taxpayers for salaries to the state taxpayers via pension costs. The school saves money and gets better teaching while the state gets less money via teacher contributions. This is because the retiring teachers had higher salaries therefore they paid more into the pension system than their lower salaried replacements.
So what happened? It turns out students did better with the inexperienced teachers than they did with the teachers who retired. The retiring teachers averaged 27 years’ experience and for a comparison, in 2012 teachers with 27 years or more experience averaged $85,000 in salary in Illinois.
Let’s take a look at District 211 in Palatine to see how much money this would be in 2012. We will use Phys Ed teachers as our comparison to see the salary differential between senior members of the staff and inexperienced teachers of the same subject. Keep in mind Dist. 211 full-time Phys Ed teachers an average salary of $105,000 for all of 14 years’ experience.
So here are the Top 3 Phys Ed teacher salaries compared to the Bottom 3 Phys Ed salaries. You can see the annual savings ($323,043) to the district when senior teachers are replaced with newbies.
For more details here is the link to the Wall Street Journal Article and for the more nerdy readers a link to the actual research paper too.