Raising the Floor: Teacher Retention Effects of a Statewide Minimum Salary Increase

The LEARNS Act increased Arkansas's minimum teacher salary from $36,000 to $50,000, guaranteed all teachers a minimum raise of $2,000, and provided school districts with the flexibility to deviate from traditional, seniority-based salary schedules. We collected districts' teacher salary schedules one year before and after implementation and integrated these data with administrative records to study districts' adjustment and teacher retention during the first three years of the reform. We find that districts made the minimum adjustments necessary. These changes increased the competitiveness of starting salaries across districts and reduced salary variation statewide. The Act also substantially increased salaries in rural and high-poverty districts, weakening the negative relationship between starting salaries, student poverty, and rurality. Using a triple-difference design, we find that teachers who received raises exceeding the $2,000 minimum were more likely to remain in their districts, with the strongest retention effects among those receiving the largest increases. We also find evidence that these effects may fade as inflation erodes the real value of the initial salary gains.