States Consider Financial Incentives to Mitigate Teacher Shortages—But Will They Work?

Blog Post
Oct. 3, 2018

Earlier this year, teachers’ clarion call for higher pay made national headlines. While advocates have long lamented that teacher salaries should be higher, the reality is that they are actually getting lower. A recent analysis finds that the compensation gap between teachers and similarly educated professionals has risen to an all-time high of nearly 19 percent (11 percent, when factoring in non-wage benefits). Not surprisingly, low and decreasing wages are commonly cited as one of several reasons schools have difficulty attracting and retaining quality teachers.

In response to teacher scarcities, states have ratcheted up multi-prong efforts that include boosting teacher compensation. In a recent report, the Learning Policy Institute highlights a few of these state-level efforts aimed at filling vacancies where they occur most, in high-poverty schools and critical subject areas such as STEM, ESL, and special education. They find that states are exploring a number of strategies to improve teacher compensation, including differentiated pay, scholarships and loan forgiveness programs, and across-the-board salary hikes.

South Carolina, for example, aims to give teachers who teach critical subject areas a stipend of $1,500 a year, with an option to enter a 7-year, $5,000 a year, loan forgiveness program in certain districts. Utah, on the other hand, is offering differential pay by school type, offering $5,000 bonuses to teachers who teach in high-poverty schools. Hawaii, like Arizona, is considering housing assistance for teachers who work in high-need schools. And a number of other states–Idaho, Oklahoma, South Dakota, Washington, and West Virginia–are giving all teachers a salary bump, although the amounts vary considerably.

While efforts to increase teacher compensation are sure to positively impact teachers’ lives, we should maintain a healthy skepticism about whether these investments alone will be enough to make a dent in teacher shortages.

For one thing, research finds that efforts to improve teacher compensation must be sustainable. Yet a number of differentiated pay schemes implemented by states are only offered for short periods of time, meaning high-performing teachers could be successfully recruited into high-need schools but not necessarily retained after bonuses are no longer in place. Colorado, for example, offers $2,800 to teachers who teach in a rural district for at least 3 years after graduation. Without a corresponding focus on retention, these types of strategies may only be successful at recruiting teachers, not keeping them.

Research also suggests the overall efficacy of efforts to boost teacher pay depend on whether compensation is sufficient. Reasonably, moderate salary increases and bonuses that do not significantly shrink the pay gap between teachers’ and other comparable professions—while a step in the right direction—may do little to attract candidates into teaching. States with the largest wage gaps between teachers and similarly-educated professionals, including Arizona (36.4%), North Carolina (35.5%), Oklahoma (34.5%), and Colorado (35.1%) have an especially long way to go to ensure their pay schedules make teaching a competitive option for college graduates.

Admittedly, states and districts face tightening budgets that can keep them from making teacher pay competitive. Here, the federal government can help. This summer, Center for American Progress made a compelling case for the federal government to increase teacher income by creating a permanent $10,000 refundable Teacher Tax Credit. Along with complementary state and district efforts, such a nationwide tax credit could make teaching more attractive to prospective teachers and limit turnover of current ones.

Of course, there are many other factors that weigh heavily on candidates’ decisions to enter the classroom and to stay once they are there. Along with paucity of compensation, a lack of support for new teachers, a dearth of meaningful professional development and career advancement opportunities, and poor working conditions all work to hobble recruitment and retention. LPI’s report documents five other policy strategies states are employing to meet some of these challenges, including revamping recruitment strategies, strengthening pathways into teaching, improving mentoring and induction supports, and developing high-quality principals. Additionally, a recent report from New America makes a case for how states can better support professional development and career advancement by rethinking their policies around maintaining a teaching license.

Without combining complementary efforts, it is unlikely that increasing teacher pay will have the strongest impact. While no one strategy will be the silver bullet to filling vacancies in high-need subjects and high-poverty schools, a multi-prong effort that focuses on improving working conditions and offering sustainable and sufficient compensation is a good place to start.

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