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Changing the Education Workforce? The Relationships Among Teacher Quality, Motivation, and Performance Pay


by Daniel H. Bowen & Jonathan N. Mills — 2017

Background/Context: With a growing body of evidence to support the assertion that teacher quality is vital to producing better student outcomes, policymakers continue to seek solutions to attract and retain the best educators. Performance-based pay is a reform that has become popular in K–12 education over the last decade. This strategy potentially produces positive impacts on student achievement in two ways: better alignment of financial incentives with desired outcomes and improved the composition of the teacher workforce. While evaluations have primarily focused on the former result, there is little research on whether the longer term implementation of these polices can attract more effective teachers.

Purpose: In this study we aim to provide evidence for potential long-term impacts that performance-based pay can have on the composition of the teacher workforce by addressing two questions: Does performance-based pay attract fundamentally different individuals, as measured by their risk preferences, to the teaching profession? Are stated preferences for a particular pay format correlated to measures of teacher quality?

Research Design: We apply methods from experimental economics and conduct surveys with 120 teachers from two school districts who have experienced performance pay. We compare the risk preferences of teachers hired under the two pay formats to test the hypothesis that performance-based pay attracts individuals with different characteristics to the profession. We also analyze teachers’ survey responses on their preferences for performance-based pay to determine their relationships to two measures of teacher quality: student test-score gains and principal evaluations.

Conclusions/Recommendations: We find mixed results regarding the ability of performance-based pay to alter the composition of the teacher workforce. Teachers hired with performance-based pay in place are no different from their colleagues. However, teachers claiming to seek employment in districts with performance-based pay in place appear significantly less risk averse. Surprisingly, additional analyses indicate that teachers’ value-added scores and performance evaluations do not predict a positive disposition towards merit pay. Thus, while these results indicate the possibility for performance-based pay to attract different individuals to teaching, they do not provide evidence that such change would necessarily improve the composition of the workforce. Policymakers should take this potential tradeoff into consideration when considering the expansion of performance pay policies.



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Cite This Article as: Teachers College Record Volume 119 Number 4, 2017, p. 1-32
http://www.tcrecord.org ID Number: 21714, Date Accessed: 9/20/2017 12:36:44 PM

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About the Author
  • Daniel Bowen
    Texas A&M University
    E-mail Author
    DANIEL H. BOWEN is an assistant professor in the Department of Educational Administration and Human Resource Development at Texas A&M University. His research primarily employs field experiments to assess policies that influence teacher quality in addition to the role of “non-core” subjects and school-sponsored extracurricular activities, such as field trips, the arts, and school-sponsored sports. Recent publications:

    Bowen, D. H., Buck, S., Deck, C., Mills, J. N., & Shuls, J. V. (2015). Risky business: An analysis of teacher risk preferences. Education Economics, 23(4), 470–480.

    Bowen, D. H., Greene, J. P., & Kisida, B. (2014). Learning to think critically: A visual art experiment. Educational Researcher, 43(1), 37–44.


  • Jonathan Mills
    Tulane University
    E-mail Author
    JONATHAN N. MILLS is a postdoctoral fellow at the Education Research Alliance for New Orleans at Tulane University. His current research focuses on the effects of school choice programs on student achievement and nonacademic outcomes, as well as the benefits and unintended consequences of college financial aid programs. Recent publications:

    Egalite, A. E., Mills, J. N., & Wolf, P. J. (forthcoming). The impact of targeted school vouchers on racial stratification in Louisiana schools. Education and Urban Society.

    Mills, J. N. (2013). The achievement impacts of Arkansas open-enrollment charter schools. Journal of Education Finance, 38(4), 320–342.


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