Andrew Biggs & Jason Richwine:

A common story line in American education policy is that public school teachers are underpaid–“desperately underpaid,” according to Education Secretary Arne Duncan in a recent speech. As former first lady Laura Bush put it: “Salaries are too low. We all know that. We need to figure out a way to pay teachers more.”
Good teachers are crucial to a strong economy and a healthy civil society, and they should be paid at a level commensurate with their skills. But the evidence shows that public school teachers’ total compensation amounts to roughly $1.50 for every $1 that their skills could garner in a private sector job.
How could that be? First, consider salaries. Public school teachers do receive salaries 19.3% lower than similarly-educated private workers, according to our analysis of Census Bureau data. However, a majority of public school teachers were education majors in college, and more than two in three received their highest degree (typically a master’s) in an education-related field. A salary comparison that controls only for years spent in school makes no distinction between degrees in education and those in biology, mathematics, history or other demanding fields.