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Towards an optimal teacher salary schedule: Designing base salary to attract and retain effective teachers

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  • Hendricks, Matthew D.

Abstract

This study presents the literature’s first estimates of the effect of teacher pay on the distribution of experience among teachers hired by public school districts. Overall, a 1% increase in base salary for teachers of a particular experience level increases the proportion of the targeted teachers hired by 0.04–0.08 percentage points. Pay increases have the largest effect on hire rates among teachers with 2–3 years of experience and the effect diminishes with experience. I show that higher teacher salaries provide a dual benefit of retaining and attracting a more effective distribution of teachers. Districts may also improve student achievement growth at no cost by reshaping their salary schedules so that they are increasing and concave in teacher experience.

Suggested Citation

  • Hendricks, Matthew D., 2015. "Towards an optimal teacher salary schedule: Designing base salary to attract and retain effective teachers," Economics of Education Review, Elsevier, vol. 47(C), pages 143-167.
  • Handle: RePEc:eee:ecoedu:v:47:y:2015:i:c:p:143-167
    DOI: 10.1016/j.econedurev.2015.05.008
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    Cited by:

    1. Hinrichs, Peter, 2021. "What kind of teachers are schools looking for? Evidence from a randomized field experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 186(C), pages 395-411.
    2. Sander Gerritsen & Sonny Kuijpers & Marc van der Steeg, 2015. "The effects of higher teacher pay on teacher retention," CPB Discussion Paper 316, CPB Netherlands Bureau for Economic Policy Analysis.
    3. Paredes Chervellini, Luciano & Ritzen, Jo, 2021. "Simulating the impact of a raise in education salaries on economic growth in Peru," MERIT Working Papers 2021-029, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    4. Sander Gerritsen & Sonny Kuijpers & Marc van der Steeg, 2015. "The effects of higher teacher pay on teacher retention," CPB Discussion Paper 316.rdf, CPB Netherlands Bureau for Economic Policy Analysis.

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    More about this item

    Keywords

    Teacher pay; Teacher selection; Student achievement;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

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