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The Effects of Education Savings Accounts (ESAs) on Teacher Pay in Texas

April 8, 2017

ESAs in Texas will likely result in increased salaries for teachers.

From the introduction:

Our estimates of the effects of education freedom through education savings accounts (ESAs) in its inaugural year in Texas indicate that teacher pay could substantially increase, with some teachers receiving as much as $28,000 more per year. Advancing education freedom through ESAs will affect teacher pay primarily by: 1) Influencing budgets of public school districts and private schools,1 and 2) Increasing competition in teacher labor markets while perhaps reducing bureaucratic inefficiencies (Ballou and Podgursky). We start by evaluating the change in student demand for public school and private school slots statewide. To estimate the number of ESA users and fiscal effects at public school districts and private schools, we use the school choice fiscal notes calculator. 2 To derive our results, we relied on data from the Texas Education Agency and Texas Private Schools Education Association (2016) to input in the calculator. We included an education savings account amount of $6,500 per student. Students are considered eligible for an ESA if they are entering kindergarten or first grade or have attended public school for at least the previous school year.

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Education