Most American public school teachers are paid according to a fixed salary schedule that determines their income based only on their years of education and classroom experience. Critics contend that these criteria are weakly associated with teacher effectiveness and instead advocate alternative compensation strategies, such as performance pay. To date, however, research on performance pay incentives for teachers has found mixed results when it comes to student achievement. Now, a new working paper by researchers from Columbia University, the University of South Carolina, and the University of California, Riverside, has become the first to analyze the impact of performance pay on American student outcomes beyond test scores.
The study examines South Carolina’s implementation of the Teacher Advancement Program (TAP), a performance pay initiative that serves mostly high-need, urban schools in several states. Several of its core components are unique among performance pay systems: TAP offers career pathways that enable teachers to advance professionally without leaving the classroom (such as roles coaching other teachers); emphasizes collaborative professional development and individualized feedback on instruction; and determines eligibility for performance pay based not only on student test scores, but also on classroom observations of teachers. In South Carolina, TAP is further distinguished by especially high bonuses and by factoring in school-wide performance (rather than being based entirely on individual teacher performance).
Compiling data from several state agencies plus school report cards, the researchers analyzed various outcomes for students who were first-time eighth graders from the 2002–03 to 2012–13 school years. (South Carolina schools participating in TAP joined the program between 2007–08 and 2010–11.) They used a statistical procedure called propensity score matching to compare outcomes of students in TAP schools to those of peers in otherwise similar but non-TAP schools. The study also accounted for the effects of college prep grants enacted around the same time, TAP’s possible influence on families’ decisions to switch schools, and student demographic factors like gender, race, and poverty.
Statistically significant results were encouraging across the board. TAP increased the likelihood of twelfth-grade enrollment by 3.5 percent and high school graduation within four years by 3.8 percent. Exposure to the program also decreased the likelihood of students’ being arrested for a felony by age eighteen by 1.4 percent and in adulthood by 0.6 percent, and it decreased their likelihood of reliance on social welfare programs by 2.7 percent. Worth noting is that these numbers are averages over time; the longer a student was exposed to TAP, the larger the effects grew. From the first to the fourth year, for example, the increased probability of twelfth-grade enrollment almost quadrupled, growing from 1.8 percent (not statistically significant) to 7.1 percent (statistically significant). And in addition to academic and societal benefits, these effects produced long-run economic benefits: The authors calculate that the reduction in crime alone offset TAP’s cost by a ratio higher than six to one.
The paper offers two major takeaways. First, South Carolina’s version of TAP appears to be particularly successful when compared with other performance pay systems. Although assessment outcomes were not the focus of the study, the authors still note that South Carolina’s program significantly raised students’ test scores within two years of their exposure, in contrast to the results of several other similar efforts (including some other states’ versions of TAP). Future research ought to examine more closely which specific elements have made South Carolina’s TAP successful in boosting student achievement where other performance pay endeavors have fallen short.
Second, the study underscores the value of examining outcomes beyond test scores. Although academic achievement is important, short-term effects don’t always correlate with crucial longer-term outcomes, as the authors note. More evidence for a cost-effective program that improves students’ well-being in adulthood could better equip advocates to navigate political opposition and to maximize the potential of performance pay policies.
SOURCE: Sarah Cohodes, Ozkan Eren, and Orgul Ozturk, “Teacher Performance Pay, Coaching, and Long-Run Student Outcomes,” National Bureau of Economic Research Working Paper Series (March 2023).
