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Do Principals Help Teach Principles? Administrator Compensation and School Performance in Colorado Public Schools

David KN, Daniel K

This study examines the relationship between principal salaries and student performance on Colorado Student Assessment Program (CSAP) tests of math, reading and writing, using multivariate quartile regressions on data from the 2002-2007 school years. Using instrumental variables to allay the concerns of potential endogeneity in administrator and teacher salaries, and random effects panel data estimation to control for schoolspecific factors beyond those which we explicitly include, we confirm the intuitive and historically documented effects of funding and conduct violations on average scholastic achievement. Most interestingly, we find that high-performance schools receive an unambiguously positive impact from higher administrator salaries at the expense of teacher salaries, while low-performance schools see the reverse effect.