The Design of Bonus Schemes and Their Impact on Teacher Recruitment and Retention: The Case of Georgia’s Bonus Program for Early-Career Math and Science Teachers

Traditionally, teacher salaries have been determined solely by experience and educational attainment. This has led to chronic shortages of teachers in particular subject areas, such as math, science, and special education. There is a small literature which finds that bonuses and loan forgiveness can ameliorate subject- specific teacher shortages by substantially increasing retention of teachers in such “high-need” subjects. In contrast to prior work, we find that Georgia’s bonus system for early-career math and science teachers has not increased teacher retention in these subject areas. The lack of efficacy can be traced to four key elements of the design and implementation of Georgia’s bonus system: uncertainty in program funding, ex-post payments that are not conditional on future employment, an eligibility cap based on years of experience, and poor communication about the program to teachers. Our findings demonstrate the need to carefully design and implement bonus systems to achieve the potential benefits of differential pay structures.