Why are teachers 'overpaid' in developing countries? : the role of the nature of educational production in teacher labor markets.
Teacher salaries account for 74% of the governmental recurrent expenses on education in 55 developing countries (Bruns, Mingat and Rakotomalala 2003). Yet in many education production function studies, teacher salaries have the lowest marginal product per dollar spent among observable school inputs (Pritchett and Filmer 1999). Meanwhile, teacher salaries are high relative to GDP per capita. These suggest that teachers are overpaid in developing countries.