It’s an economic debate that’s been going on since Adam Smith: Is there a correlation between pay and quality/productivity of work?
The Internets have lit up recently with stories about which countries pay teachers the most courtesy of a report, “Education at a Glance.” The research is by the Organization of Economic Cooperation and Development, the Paris-based think tank that put on the Climate Change conference last month.
The title “Education at a Glance 2015” is kind of misleading because it’s a 568-page glance, with an incredible amount of data on graduation rates and academic achievement broken down country-by-country, drawn from 2013 data. (The 2013 salary data is adjusted for cost of living using the Purchasing Power Index (PPP) and converted into U.S. dollars from euros and other currencies. Not included are bonuses or other payments or benefits.)
Every publication from Quartz to, well, this one has taken a look at the low-hanging fruit: Which country pays its teachers the most?
The easy answer is, Luxembourg, by a mile, with teachers making well over the equivalent of $125,000 annually.
The wealthy little grand duchy pays its starting teachers 40 percent more than No. 2 country Germany, $80,000 versus about $57,000. The starting salary for lower secondary teachers in Luxembourg exceeds every other nation’s maximum teacher salary. At the opposite end of the spectrum, Estonian teachers top out at about $17,000 a year.
On average, lower secondary teachers around the world get a starting salary of $31,013, rising to $57,201 maximum salary for the top cohort.
But … it’s not until you get to the page (301) with the chart showing the salary cost of teachers per student that you understand that Luxembourg is outspending everyone else, often by a magnitude of 3 or 4!
In Luxembourg, the salary cost per student for upper secondary is $12,821. In Hungary, its $1,287.
As a percentage of GDP, Luxembourg’s spending is very frugal compared to countries such as Israel and New Zealand. (This is on page 234 of the document in case you’re scoring at home.) Israel’s education spending is equivalent to 6.5 percent of GDP, while New Zealand’s spending is equivalent to a whopping 6.9 percent, the highest in the OECD research.
By comparison, Luxembourg devotes only 3.9 percent of its GDP to education. South Korea, the top rated system, also spends big – 6.7 percent of GDP.
Now, you’re asking, so what’s the correlation between money and performance? Well, here’s the deal … for all the money spent, Luxembourg finishes mid-pack and well behind South Korea and even Poland, which has numbers off the charts when it comes to the percentage of citizens who have at least attained upper-secondary educations. (Finished high school, in America-speak.) Remember, these are your people who are likely to go on to careers in what Americans call STEM jobs (science, technology, engineering and math) and Europeans call ICT for information, communications and technology.
In Poland, 94 percent of 25-to-34-year-olds have attained upper-secondary education. In Luxembourg, the number is 87 percent. (This chart is on page 31 of the OECD report.) Same for tertiary degrees such as masters, with 31 percent of 25-to-34-year-olds with master’s degrees compared to 25 percent. (Page 43.)
So, let’s drop the OECD script for a second and go to some less academically stringent ranking of global educations. London-based educational publishing firm Pearson PLC publishes one of the most respected national rankings. Pearson doesn’t rank Luxembourg on its list, which is topped by No. 1 South Korea and No. 2 Japan. The United Kingdom, Finland, Hong Kong, Singapore, Canada, the Netherlands, Denmark, Ireland and Poland are all in the top ranks.
The OECD’s own 2015 list of top countries, based on math and science scores of 15-year-olds, ranked Singapore No. 1 and South Korea No. 2. Finland is ranked No. 6.
And remember little Estonia, which pays its top teachers a paltry $17,000 per year? Well, Estonia came in at No. 7!
Switzerland is No. 8 and the Netherlands No. 9.
Luxembourg, where they spend all that money? The best the Grand Duchy could do is No. 26, just above the United States at No. 28 and Spain at No. 27.
Before you laugh, there is one very tangible metric that indicates all that money Luxembourg spends pays off in a very tangible way.