Do Higher Salaries Buy Better Teachers?” (Retrieved on April 25, 2002 at: http://edpro.stanford.edu/eah/eah.htm

Do higher salaries raise the quality of teaching? Many influential reports and proposals advocate substantial salary increases as a means of attracting and retaining more talented teachers in the public schools and of encouraging harder work by current teachers. Salary policies have also been cited as important for offsetting changes in demands outside of schools and for dealing with the potentially unattractive working conditions often identified in central city schools. The empirical evidence on the link between teacher quality and pay is, however, decidedly mixed— raising doubts that there is a strong relationship between the two. Direct analyses of student achievement, for example, provide limited evidence of any systematic relationship. Two explanations have emerged in response to this evidence. On the one hand, some argue that the true relationship between teacher quality and salaries is quite strong, but methodological and data problems have impeded the identification of salary effects. Others take a less sanguine position, arguing that the evidence captures accurately the weak performance incentives in the public schools that lead administrators to make hiring and retention decisions that are not strongly linked with teacher quality. 1 The evidence is quite strong on one point: teacher quality is an important determinant of achievement (e.g., Rivkin, Hanushek, and Kain 1998). There are four main methodological problems that impede the estimation of the true relationshi