Teacher Pay Reforms

The Political Implications of Recent Research

New report suggests that improving teacher quality could dramatically improve achievement in American schools.

Kennedy Elementary School teacher Marjorie Hunt-Bluford works with her fifth-grade students on math problems. Hunt-Bluford is one of more than 7,000 Houston Independence School District teachers to earn a merit pay bonus in 2006. (AP/Pat Sullivan)
Kennedy Elementary School teacher Marjorie Hunt-Bluford works with her fifth-grade students on math problems. Hunt-Bluford is one of more than 7,000 Houston Independence School District teachers to earn a merit pay bonus in 2006. (AP/Pat Sullivan)

Read the full report (PDF)

Education research convincingly shows that teacher quality is the most important schooling factor influencing student achievement. A very good teacher as opposed to a very bad one can make as much as a full year’s difference in learning growth for students. Indeed, the effect of increases in teacher quality swamps the impact of any other educational investment, such as reductions in class size.

These findings (documented in this paper) suggest that improving the quality of the teacher workforce presents educational policymakers with a tremendous opportunity to dramatically improve the educational achievement of America’s students. Unfortunately for policymakers, increasing teacher quality is no simple task: There does not appear to be any specific credential or characteristic that is a silver-bullet predictor of quality. This casts doubt on the prospects of using state licensure policy to determine who is eligible to teach (a “gatekeeper approach”) to greatly improve the quality of the teacher workforce. Instead, I suggest here that policymakers may wish to address teacher performance through a focus on teacher workforce policies—that is, policies that are based on a teacher’s actual demonstrated classroom performance.

Compensation is a key workforce policy that holds promise for reform. The reasons? Well, first off, there are some strong theoretical reasons to believe that the current pay system used by most school systems—the single-salary schedule—leaves room for improvement. It does not recognize the labor market reality that some teachers, based on their college quality and training, will have more competing opportunities outside of teaching than others. And, not all teaching jobs are alike, or even near alike as some schools and classrooms will be tougher to staff than others given their working conditions (which include the readiness to learn of their students).

Second, research shows that teachers are responsive to monetary incentives. Few school systems strategically use compensation as a policy tool to achieve various objectives: a fairer allocation of teacher quality across students, hiring and keeping teachers with key knowledge and skills, and increasing student achievement via measurable results. Finally, research on the small amount of experimentation with alternatives to the single-salary schedule—various forms of individual or group-based merit pay, pay for specific knowledge and skills, and so-called combat pay for teaching in high-needs schools—generally suggests that teacher pay reform can be an effective way to achieve policy objectives.

But there are significant obstacles facing policymakers who wish to use compensation as a tool for influencing the quality of the teacher workforce. Many aspects of teaching make it less amenable to salary differentiation, particularly in the form of merit pay, than other private sector occupations. Teachers’ jobs are complex and multidimensional, and we know very little about how to objectively and accurately quantify their productivity. It is therefore necessary to exercise caution as implementing the wrong type of incentives might encourage teachers to focus on a narrow set of objectives and discourage collaboration.

At the same time, there are ways to design pay systems to help avoid pitfalls, and we know from private schools that even the most controversial type of pay differentiation—merit pay—can work in a K-12 education setting. As this paper will describe, experiments along these lines in select state and urban school systems indicate that education reform in this direction holds significant promise for American students.

Still, major hurdles to implementing pay reforms remain, including significant union opposition, the dynamic of local school district politics, and the institutional inertia of public school systems. Despite these obstacles, teacher pay reform appears to be high on the policy agenda. As we shall see, a number of states and localities are engaged in high-profile experiments with alternatives to the single-salary schedule, and the federal government is encouraging these experiments through grants to states and school districts for developing and implementing innovative teacher pay structures.

Based on this review of what we know about teacher pay and reform, this paper will argue that pay reform holds promise, and then offer the following recommendations for those who wish to see teacher pay reforms successfully implemented:

  • Teacher pay reform is much more likely to be successful if the reform takes place at the state level. States, unlike most localities, have the capacity to develop data and analysis systems that can credibly be used to assess significant areas of shortage, track teacher performance, and administer a differentiated pay system. And from a political perspective, it may be necessary to engage state governments in this effort in order to buffer some of the negative local political consequences arising from various pay reforms.
  • States must make basic investments in their education data infrastructures. Relatively few states have databases that permit the linkage of teachers to their students and the tracking of both over time. Much of what we now know about teacher quality has been learned from analyses of these states, as this report will demonstrate. This type of data structure is really a prerequisite for assessing teacher effectiveness (in the context of determining merit pay policies) or for analyzing the efficacy of state policies (when considering combat pay policies such as the ones we will examine shortly).
  • More basic research is needed on the data and methodological requirements for using student achievement tests as a gauge of teacher effectiveness. Research has clearly demonstrated that it is no simple task to isolate teachers’ contributions toward student achievement or to know how much student and teacher data is necessary in order to make strong inferences about the differences in performance between teachers. Mistakes about teacher performance carry particularly high stakes when performance is linked to teacher pay. Any such errors would seriously undermine political support for compensation reforms—and could even lead to legal action.
  • States and localities need to engage in a number of pay experiments. Furthermore, there must be independent evaluation of these experiments, as opposed to evaluation by individuals or organizations having a stake in the outcome. So few pay reforms have been analyzed to date that we have very little information about the efficacy of any particular reform structures.

Pay is certainly not the only way to manage a workforce, but it is one of the primary policy tools that school systems have at their disposal. The strict adherence to the traditional single-salary schedule therefore strips school districts of a key managerial tool. Even though the research on teacher compensation reform is hardly definitive enough to recommend the use of specific pay reforms to reach specific goals, the few quantitative studies that do exist suggest that a more strategic use of teacher compensation could lead to both a more equitable allocation of teachers among students and increased student achievement.

Read the full report:

The positions of American Progress, and our policy experts, are independent, and the findings and conclusions presented are those of American Progress alone. A full list of supporters is available here. American Progress would like to acknowledge the many generous supporters who make our work possible.