Table 14 Comparison of Teacher Salaries in Selected World Education Indicator (WEI) Participant <u>Countries</u>

|||**Primary Edu**|**cation**|**Junior Se**<br>**Educ**|**condary**<br>**ation**|**Senior Seconda**|**ry Education**|
|---|---|---|---|---|---|---|---|
|**Year**||**Starting**<br>**salary**|**Salary at top**<br>**scale**|**Starting**<br>**salary**|**Salary at top**<br>**scale**|**Starting salary**|**Salary at top**<br>**scale**|
|Chile|2003|11,709|18,437|11,709|18,473|11,709|19,302|
|Egypt|2002/03|1,046|...|1,046|,...|...|...|
|**Indonesia**|**2002/03**|**1,002**|**3,022**|**1,002**|**3,022**|**1,042**|**3,022**|
|Malaysia|2002|9,230|17,470|13,480|29,151|13,480|29,151|
|Paraguay|2002|7,950|7,950|12,400|12,400|12,400|12,400|
|Philippines|2002/03|9,890|11,756|9,890|11,756|9,890|11,765|
|Sri Lanka|2002|3,100|3,945|3,100|4,509|3,945|5,073|
|Thailand|2003/04|6,048|28,345|6,048|28,345|6,048|28,345|
|Uruguay|2002|4,850|7,017|4,850|7,017|5,278|7,444|
|OECD mean|2003|24,287|40,539|26,241|43,477|27,455|45,948|

_Source:_ UNESCO-UIS/OECD 2005 Education Trends in Perspective: Analysis of the World Education Indicators. _Note:_ Figures are in USD Nationally, however, when comparing wage levels of teachers to salaries of others with equivalent education, salaries turn out to vary by level of education and actually decrease as education increases. An analysis of Indonesia’s 2004 Labor Force Survey (Sakernas) reveals that the monthly earnings of primary teachers with qualifications below the diploma level (approximately 40 percent of teachers), are 16 percent higher than the earnings of other paid workers. This differential decreases to 6 percent for teachers with a first- or second-level diploma (approximately 32 percent of teachers) but becomes negative for primary teachers with higher education. In particular, teachers with a third-level diploma (approximately 8 percent) or a university degree (approximately 19 percent) earn 21 percent and 35 percent less, respectively, than other workers with equivalent levels of education. These results suggest that teachers with relatively low levels of education are comparatively overpaid, while those with higher levels of education are relatively underpaid. It is noteworthy that these earnings trends create a disincentive for under-qualified teachers to attain additional education, because their wage relative to others with similar qualifications would decrease (Annex 7).

Teacher earnings are 21 percent lower than those of other paid workers with equivalent qualifications, and 26 percent lower than those of other civil servants.32 Further disaggregating teachers into those that teach primary and those that teach non-primary levels, the estimation results suggest that primary teachers are paid 6 to 18 percent less per month than other paid workers or civil servants, whereas the earnings differential for non-primary teachers is as high as 33 percent (Table 15) .<sup>33</sup> Table 15 Monthly and Hourly Earnings of Primary and Non Primary Teachers Relative to Civil Servants <u>and Other Workers</u>

|**Occupation**|<br>**Relative**<br>**wor**|**Monthly e**<br>**to other**<br>**kers(%)**|**arnings**<br>**Relative**<br>**serva**|**to civil**<br>**nts(%)**|**H**<br>**Relative t**<br>**work**|**ourly ear**<br>**o other**<br>**ers(%)**|**nings**<br>**Relativ**<br>**serv**|**e to civil**<br>**ants(%)**|
|---|---|---|---|---|---|---|---|---|
|Teachers|21|Under|26|Under|23|Over|19|Under|
|Teachers primary|6|Under|18|Under|46.9|Over|13|Under|
|Teachers non- primary|33|Under|32|Under|5|Over|23|Under|
|Civilservants (excl.teachers)|24|Over|--|--|46.7|Over|--|--|

_Source:_ World Bank staff calculations based on Sakernas 2004.

However, teacher hourly earnings compare rather favorably to those of other workers, because teachers tend to work fewer hours but are typically paid more per hour. According to data from

> 32 These estimates control for gender, age, urban or rural residence, and level of teacher education.

> 33 These results are consistent with previous empirical studies based on the same data source; such as Filmer 2002, with a slight increase in the wage differential estimated for primary school teachers compared to other workers, changing from 2.5 to 6 percent (Annex 8).

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