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...