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The Rate of Return to Teaching: How does it Compare to other Graduate Jobs?

Peter Dolton and Tsung-Ping Chung
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Tsung-Ping Chung: Centre for Economic Performance, London School of Economics.

National Institute Economic Review, 2004, vol. 190, issue 1, 89-103

Abstract: The problem of recruiting graduates into the teaching profession and retaining them has bedevilled recent UK governments. An obvious question to ask is why is teaching so relatively unattractive for graduates. This paper presents a careful analysis of this problem. We compare the earnings of qualified teachers who choose to teach with the ‘opportunity wage’ for those who do not teach. We find that the ‘rate of return on career choice’ for teachers has been declining for both men and women over the past 25 years although teaching is still relatively well paid for women. From our net present value analysis we estimate that males who enter teaching lose, on average, earnings of ©40,000 to ©67,000 over their lifetime while females could stand to gain average earnings of ©42,000 to ©65,000 if they opted to become school teachers.

Date: 2004
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