Getting and keeping great teachers: does merit pay work?

Putting great teachers into more classrooms will help students learn better. But do policies like giving bonuses to highly-rated teachers and firing the worst teachers actually work to attract and keep great teachers? In theory, yes, a little. “Labor Market Behavior Actually Matters In Labor Market-Based Education Reform”, Matthew Di Carlo, Shanker Blog, July 26, 2012. Blogger Matt Di Carlo summarizes a paper by economist Jesse Rothstein, who used a theoretical model to test assumptions about labor market strategies like teacher performance pay and dismissal policies:

Both strategies are, at their cores, focused on selection (and deselection) – in other words, attracting and retaining higher-performing candidates and exiting, directly or indirectly, lower-performing incumbents. Both also take time to work and have yet to be experimented with systematically in most places; thus, there is relatively little evidence on the long-term effects of either.

Rothstein’s approach is to model this complex dynamic, specifically the labor market behavior of teachers under these policies (i.e., choosing, leaving and staying in teaching), which is often ignored or assumed away, despite the fact that it is so fundamental to the policies themselves. He then calculates what would happen under this model as a result of performance pay and dismissal policies – that is, how they would affect the teacher labor market and, ultimately, student performance.

Rothstein found that labor market-based strategies were cost effective and had a small, long-term positive effect.

Di Carlo offers some comments about how these strategies should be used. First, to keep teaching careers attractive, offer teachers higher pay to offset the risk of getting fired for bad results. Second, remember that labor market strategies will take time to work and will probably show modest, not overwhelming, results. Finally, make sure teacher evaluations are accurate and fair.

Charter schools are known for adopting innovative strategies like merit pay. (For example,  at Green Dot Public Schools in California: “Green Dot charter schools move toward merit pay instead of seniority for teachers”, Rob Kuznia, Contra Costa Times, July 6, 2012.) These strategies can be applied in public district schools, too.

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