In the last few decades, a progressively smaller share of the top college graduates became teachers. Aptitude is measured by scores on standardized tests, and there is compelling evidence that high aptitude translates into high teaching skills in the classroom. In the case of teachers, the top aptitude group includes graduates whose test scores placed them in the 80th percentile (the top 20%). In 1964 about 25 percent of the female graduates in the top aptitude group became teachers, but by 2000 the share had dropped to 11 percent. As a result, the share of classroom teachers from the top aptitude group decreased dramatically. What happened?
A recent study suggests that the loss of high-aptitude teachers resulted from salary compression caused by unionization. In 1963 a teacher in the top aptitude group was paid 59 percent more than the average teacher, while a teacher in the lowest aptitude group (bottom 20% of test scores) was paid 28 percent less than the average teacher. By 2000 these salary differences had almost completely disappeared teacher salaries were nearly independent of aptitude, and depended almost exclusively on seniority and the amount of graduate coursework. The elimination of the salary differentials naturally decreased the supply of the highest aptitude teachers, who could earn salaries more in line with their aptitudes in other occupations. For example, a larger share of the top aptitude group became computer specialists, accountants, and managers.