Bonuses Increase Retention of High-Quality Teacher and Student Achievement in Disadvantaged Schools

One of the challenges to improving results in highly disadvantaged schools is recruiting and retaining high quality teachers. Disadvantaged schools often have high teacher turnover which impacts on student achievement. A new US study has found that selective retention bonuses for high quality teachers leads to increases in student achievement in high poverty schools.

OECD research shows that disadvantaged schools in Australia have more students per teacher, more teacher shortages, more teacher absenteeism, more poorly qualified teachers, more teachers teaching out-of-field, more inexperienced teachers, more teacher turnover, and more novice teachers than advantaged schools.

High rates of teacher turnover in disadvantaged schools have negative impacts. It is difficult to create a supportive learning culture in a school where large proportions of the teaching force are new each year. The loss of high quality teachers lowers the effectiveness of the schools’ teaching force and limits the potential for leadership development, mentoring, and support for the teachers who remain. It reduces the capacity of the school to develop a culture of learning, consistency and support for students.

Incentives to attract teachers to disadvantaged schools in Australia mostly focus on remote and rural schools rather than urban areas. The new US study suggests that governments should consider incentive schemes to attract high quality teachers to disadvantaged urban schools.

In recent years, a growing number of states and school districts in the US have implemented various forms of financial incentives to teachers. Selective retention bonuses (SRBs) are one form of incentives aimed at reducing attrition of highly rated teachers or teachers in hard-to-staff subject areas like maths and science. SRBs differ from conventional pay-for-performance plans by systematically targeting the high-quality teachers and reducing turnover.

Several studies have found relatively promising results when estimating the effects of financial incentives’ in promoting teacher retention in high-need schools. However, they say relatively little about the impact of SRBs on student results.

The new study examined the impact a retention bonus program for highly effective (Level 5) teachers in Priority Schools (low performing high poverty schools) in Tennessee. The program was introduced in 2013 to combat high rates of teacher turnover among highly-effective teachers in chronically low performing schools. The attrition rate amongst high quality teachers in predominantly low-income, Black, poor performing schools was 23% which was more than three times greater than the state-wide attrition rate of seven per cent for these teachers.

Under the SRB program, a one-off $5,000 retention bonus was offered to any Level 5 teacher teaching in a Priority School to stay in the school for the current school year (2013-14). On average, the $5000 bonus constituted a 10% salary increase, or the equivalent of a teacher with a master’s degree moving from 10-15 years of experience on a district salary schedule. The bonus was not offered for a second year.

The study confirmed the findings of an earlier study that the SRB program increased the percentage of high-quality teachers in Priority Schools. Those who accepted bonuses and remained in their schools had overall teacher effectiveness ratings much higher than the state average, while the average of teachers hired by Priority Schools was significantly below the state average. In addition,

the study found that the program also increased student achievement. Allowing for student characteristics, reading and maths scores increased by a small amount in only one year.

Students’ test scores in reading improved significantly more in schools participating in the SRB program than in otherwise similar non-participant schools in the years following implementation. Reading achievement effects also appear to persist at least one year after the teacher retention incentives were removed. The impact on maths scores was smaller, but may have been driven by smaller effects of the retention bonus on math teachers’ decisions to remain at Priority Schools.

The study concluded that targeted incentives can serve as a tool for policymakers to improve the quality of the teachers in disadvantaged schools.

Because teachers across the effectiveness spectrum often leave high-poverty, high-minority schools of their own volition, and are generally replaced by less-experienced, less-effective teachers, bonuses that retain teachers at the higher end of the effectiveness distribution can have substantial impacts on the quality of a school’s faculty. [p. 157]

The findings of the study indicate that financial incentives can marginally shift teachers’ decisions to persist in the challenging work environments of high-accountability, high-poverty, racially isolated schools. However, for many teachers, additional pay alone is inadequate to overcome pressures to leave, and only affects the underlying learning and working conditions to the extent that retained teachers improve the leadership culture. Further research is necessary to examine the roles of non-pecuniary incentives, and the interactions between conditions and simple salary improvements.

As the authors observe, policies that improve working conditions and better integrate student populations across schools to minimize concentration of economic disadvantage are more likely to have larger, more sustainable effects on the stability and equitable distribution of high-quality teachers. However, in the environment of highly segregated schools and the unequal distribution of resources, financial incentives to attract and retain effective teachers and leaders in “hard-to-staff” disadvantaged schools can both mitigate the damages of segregation and make integration more attractive to both parents and policy makers.

The study is published in the February issue of the Economics of Education Review.

Trevor Cobbold

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