Teacher merit pay has positive effect on student test scores

From recent strikes across the country—including the St. Paul teachers’ union threat of striking on March 10—to Democratic presidential candidates’ pay increase promises, the current teacher compensation debate has departed from once-prevailing arguments about the topic.

No longer is the concern about how teachers are paid but how much they are paid.

Results from a recent study, though, reveal how teachers are compensated is worth revisiting, especially because it is linked to higher test scores.

The meta-analysis reviewed 37 studies, including 26 conducted in the U.S., to note the link between teacher pay incentives and student test scores.

Among the U.S. based studies, the results suggest that the effect of teacher merit pay on student test scores is positive and statistically significant.

The effects varied by program design, such as whether the program was paired with professional development, but were still significant regardless. Higher award amounts, and programs that awarded merit pay by rank-order versus to a group of teachers, produced stronger results as well.

Merit pay programs paired with in-service professional development produce an effect estimate that is larger than the overall effect. Notably, merit pay programs paired with professional development produce one of the largest effect sizes across the different program characteristics. When we examine merit pay programs without a professional development component, the effect is statistically significant and nearly identical to the overall effect, suggesting that the positive results from merit pay are not driven by professional development opportunities. Also, merit pay programs using pay criteria based on multiple measures of teacher effectiveness are associated with an effect size that is larger than the overall summary effect.
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We find that larger incentives are associated with larger effect sizes, though it is important to keep in mind that these estimates are based on a small number of studies. Finally, incentive programs in operation for fewer years are associated with larger effects than longer-running programs.

The study also found “strong evidence that the effects of merit pay on teacher motivation are aligned with its effects on student test scores” and that merit pay helps attract and retain high-performing teachers; thus, improving the composition of the teacher workforce. There is also evidence merit pay can be used to entice effective teachers to work in lower-performing schools.

While not all merit-pay programs that have been implemented have succeeded, performance-pay programs do produce positive results on student outcomes and should rejoin the teacher compensation debate.