Keeping the Best Teachers: Is Money the Answer?

Non-monetary awards may be more important than money for retaining the best teachers

Teaching is one of the most important professions, vital to a nation’s long-term dynamism and productivity. But it is simply too hard to get all but the most dedicated teachers to commit to long-term careers, when, as in Chile and the United States, they make two-thirds of what people of a similar educational background earn.

That is the dilemma Chile tried to confront in 2002 when it established a Pedagogical Excellence Award as a way of providing a monetary incentive to keep its best teachers in the public-school system.  The award, which leads to an average 6% annual increase in salary for up to 10 years, is based on rigorous criteria. To qualify, teachers must take a written exam demonstrating their knowledge in their area of expertise and submit a portfolio, including lesson plans and a recording of a class. Only around one-fourth of applicants pass.

The negligible impact of a bonus

But the award seems to have negligible effects on teacher retention. Indeed, as Alejandra Ramos and I reveal in a recent study, it does little to change a situation in which some 7% of teachers desert the public system each year. Why would this be?

The question seems to go to the heart of what monetary incentives really mean in a profession like teaching where, because they occur in the public sector, competition is limited and wages are fixed. One car company in the private sector may be able to lure top engineers away from another car company by offering dramatically higher salaries. But in a public-sector profession like teaching, such competition in the market doesn’t exist. Instead, great teachers who stay in the profession do so because they see teaching as a labor of love; because they are imbued with a mission to inspire children and sharpen their minds. It is a bit like doctors who travel to remote parts of the world with the organization Doctors Without Borders to save children’s lives. Most of those doctors could almost certainly make far higher wages in private practice. So you’re unlikely to convince them to stay on by offering them higher salaries. If they were in it for the money, they wouldn’t be with the organization to begin with.

An award’s unintended effects

The award may also have unintended effects. It may raise morale and increase the status of winners. But by increasing their status and hence the demand for their services, it also may empower award winners to desert underperforming schools, where teaching is harder and they are needed the most, for the highest performing schools where teaching is easier and they are needed the least.

This is at least what we seem to have observed. Our study reveals that teachers were 6 percentage points more likely to move to a new school within 14 months of winning the award.  This explains about a third of the mobility we observe during this time period. Many award winners, if they weren’t changing schools to be closer to their homes, were seeking out schools with higher performing students, we speculate.

To its credit, Chile has understood that teachers are vastly underpaid. It has bonuses to reward those willing to teach in underserved communities. And it has provided a 6% bonus for all teachers at the best ranked schools within each of several different categories that are based on socioeconomic and other considerations.

Teachers may value non-monetary awards more  

But our research suggests that the most important incentives may well be non-monetary. While small pay rises can help teachers make ends meet, placing fewer administrative burdens on them and providing opportunities for professional development may make the biggest difference. They may strengthen the feeling among people who already have given up the possibility of a high salary that they are being empowered to fulfill their core mission of shaping children’s minds and bettering children’s futures. They may in this way provide the greater satisfaction and meaning that gives teachers their staying power.

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The Author

Samuel Berlinski

Samuel Berlinski

Samuel Berlinski is a Lead Economist at the Research Department of the Inter-American Development Bank. Prior to joining the Bank in 2010, he was an Assistant Professor of Economics at University College London and previously held appointments at Universidad de San Andrés and the London School of Economics. His work has appeared in numerous journals including the Journal of Public Economics, Journal of Law and Economics and Economic Development and Cultural Change. His research at the Bank focuses on the evaluation of public policy, with particular emphasis on Education, Health and Labor Markets. He completed his undergraduate studies in Economics at Universidad de Buenos Aires and obtained a Ph.D. in Economics at the University of Oxford, Nuffield College.

2 Comments

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  1. Retention should be a system, a network, not an award or even money. Conditions of work, the places, the organizational culture, amenities, … everything makes the system or network of teacher retention. That’s in general. On the other hand, Chile is a very special case. Education in Chile is a huge business and education institutions have great power, that can make any teacher go to the private sector if they want. So it’s difficult and an award is clearly not enough.

  2. Teachers are very important. The have the important role to educate the professionals of the future.

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