DESCRIPTORS Compensation (Remuneration); *Educational Quality; Elementary Secondary Education; Professional Recognition; Teacher Competencies; *Teacher Effectiveness; *Teacher

This paper draws on the matched panel data of the UTD Texas School Project to investigate how shifts in salary schedules affect the composition of teachers within a district. When trying to estimate the true relationship between teacher quality and salaries, four methodological problems typically intervene: measuring teacher quality; distinguishing between shifts in salary schedules and movements along a given schedule; determining how the recent history of pay levels, combined with current pay, influences the composition of teachers; and discerning the existence of compensating differentials for different working conditions, which complicates the interpretation of observed salary differentials across districts and states. The panel data permit separation of shifts in salary schedules from movement along given schedules, and, thus, the analysis is more closely related to existing policy proposals. In analyses both of teacher mobility and of student performance, teacher salaries were shown t