Teacher Pay and Student Performance: Evidence from Brazil

In this paper, we provide evidence of the effects of teacher’s pay increases on students’ learning in the context of developing countries (São Paulo state public education). We explore the variation in teachers' pay, given by the rule of additional salaries by length of service (quinquennium rule). We observed each teacher's eligibility for salary increases and explored the differences in the teachers’ admission date throughout the year to calculate the exposure time of teachers treated at higher salaries. We employ a difference-in-differences strategy to control for unobserved characteristics of teachers belonging to different admission cohorts. Our results are in line with what is found in the international empirical literature: salary increases for incumbent teachers do not seem to affect their productivity and, therefore, are not capable of impacting student learning in basic education.