What happens when we pay our teachers more? Evidence from New Jersey public schools

This paper examines the impact of increasing teacher salaries on student outcomes by exploiting variation from the “50K The First Day” campaign that established a $50,000 salary floor for new teachers across New Jersey school districts. Using school-level data from 2003 to 2019, I employ a staggered difference-in-differences design with variation in both timing and magnitude and first show that the campaign shifted the entire salary schedule, raising pay for incumbents as well as new teachers (approximately $1500 on average). I then estimate effects on standardized achievement, graduation, and near-term college enrollment. Achievement gains emerge gradually: by five years after adoption, high school Math and ELA increase by about 0.15–0.20 and 0.12–0.17 standard deviations (SD), respectively with modest increases in Grade 4 Math, average effects are 0.03–0.05 SD. Despite higher salaries across the experience distribution, per-pupil spending – both total and teacher-specific – does not increase. Instead, districts appear to finance the schedule change through modest staffing reductions. Analyzing the mechanisms through which these positive effects could have been observed, I rule out teacher migration as a key driver suggesting that the observed improvements are more likely due to changes in teacher motivation and the quality of new teachers entering the profession.