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Teacher Compensation

During the 2009–2010 school year, U.S. public schools spent $214 billion for salaries and $74 billion for benefits for instructional personnel. These compensation payments account for 55% of K-12 current expenditures and 90% of instructional costs. Given the large share of K-12 costs that arise from educator compensation, even small gains in efficiency can yield large social dividends.

Concern over school performance and teacher quality is stimulating interest in more efficient and performance-oriented teacher compensation systems. Congress has also provided an impetus for experiments with performance pay for teachers through its Teacher Incentive Fund grants, which since 2006 have awarded $1.6 billion to states and school districts. In addition, implementation of performance pay was encouraged by the U.S. Department of Education when it awarded $4 billion ...

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