Teacher Compensation and Local Labor Market Conditions in California: Implications for School Funding

Spending on teachers accounts for slightly more than half of total education spending in California and is an important driving factor in school budgets. This paper addresses
the following questions:

1. How does teacher compensation vary across California school districts and how much of the variation is driven by labor market factors beyond districts’ control?
2. What are the important variables in a formula designed to equalize the labor purchasing power of districts?
3. How might equalizing the labor purchasing power of California districts further the state’s education goals?