At the Intersection of Money & Reform Part I: Teacher Compensation

Posted on October 30, 2015



The blogging has been quiet for a while. This is partly because I feel like most issues that arise have already been dealt with somewhere on this blog. Also because I’ve been involved in several, simultaneous, long-term projects. These projects intersect with many topics I’ve addressed previously on this blog. At times, this blog serves as a palette for testing/sharing ideas. So… in this, and a rapid fire sequence of follow up posts, I will share some excerpts of forthcoming, and early stage in progress work. 

[from work in progress… some re-used stuff here, from http://www.shankerinstitute.org/resource/does-money-matter]

The Coleman report looked at a variety of specific schooling resource measures, most notably teacher characteristics, finding positive relationships between these traits and student outcomes. A multitude of studies on the relationship between teacher characteristics and student outcomes have followed, producing mixed messages as to which matter most and by how much.[i] Inconsistent findings on the relationship between teacher “effectiveness” and how teachers get paid – by experience and education – added fuel to “money doesn’t matter” fire. Since a large proportion of school spending necessarily goes to teacher compensation, and (according to this argument) since we’re not paying teachers in a manner that reflects or incentivizes their productivity, then spending more money won’t help.[ii] In other words, the assertion is that money spent on the current system doesn’t matter, but it could if the system was to change.

Of course, in a sense, this is an argument that money does matter. But it also misses the important point about the role of experience and education in determining teachers’ salaries, and what that means for student outcomes.

While teacher salary schedules may determine pay differentials across teachers within districts, the simple fact is that where one teaches is also very important in determining how much he or she makes.[iii] Arguing over attributes that drive the raises in salary schedules also ignores the bigger question of whether paying teachers more in general might improve the quality of the workforce and, ultimately, student outcomes. Teacher pay is increasingly uncompetitive with that offered by other professions, and the “penalty” teachers pay increases the longer they stay on the job.[iv]

A substantial body of literature has accumulated to validate the conclusion that both teachers’ overall wages and relative wages affect the quality of those who choose to enter the teaching profession, and whether they stay once they get in. For example, Murnane and Olson (1989) found that salaries affect the decision to enter teaching and the duration of the teaching career,[v] while Figlio (1997, 2002) and Ferguson (1991) concluded that higher salaries are associated with more qualified teachers.[vi] In addition, more recent studies have tackled the specific issues of relative pay noted above. Loeb and Page showed that:

“Once we adjust for labor market factors, we estimate that raising teacher wages by 10 percent reduces high school dropout rates by 3 percent to 4 percent. Our findings suggest that previous studies have failed to produce robust estimates because they lack adequate controls for non-wage aspects of teaching and market differences in alternative occupational opportunities.”[vii]

In short, while salaries are not the only factor involved, they do affect the quality of the teaching workforce, which in turn affects student outcomes.

Research on the flip side of this issue – evaluating spending constraints or reductions – reveals the potential harm to teaching quality that flows from leveling down or reducing spending. For example, David Figlio and Kim Rueben (2001) note that, “Using data from the National Center for Education Statistics we find that tax limits systematically reduce the average quality of education majors, as well as new public school teachers in states that have passed these limits.”[viii]

Salaries also play a potentially important role in improving the equity of student outcomes. While several studies show that higher salaries relative to labor market norms can draw higher quality candidates into teaching, the evidence also indicates that relative teacher salaries across schools and districts may influence the distribution of teaching quality. For example, Ondrich, Pas and Yinger (2008) “find that teachers in districts with higher salaries relative to non-teaching salaries in the same county are less likely to leave teaching and that a teacher is less likely to change districts when he or she teaches in a district near the top of the teacher salary distribution in that county.”[ix]

With regard to teacher quality and school racial composition, Hanushek, Kain, and Rivkin (2004) note: “A school with 10 percent more black students would require about 10 percent higher salaries in order to neutralize the increased probability of leaving.”[x] Others, however, point to the limited capacity of salary differentials to counteract attrition by compensating for working conditions.[xi]

In a perfect world, we could tie teacher pay directly to productivity, but contemporary efforts to do so, including performance bonuses based on student test results, have generally failed to produce concrete results in the U.S.[xii] Recently published studies of individual and group financial incentives continue to find mixed to null effects. [xiii] Alternative compensation models in some settings have yielded positive results. Dee and Wyckoff (2014) find some evidence that comprehensive strategy combining teacher evaluation and financial incentives can yield marginal improvements to the average rate of student achievement growth among retained teachers.[xiv] Similarly, in a study of Austin, TX pay for performance (P4P) program, Balch and Springer (2015) found that ““The AISD REACH program is associated with positive student test score gains in both math and reading during the initial year of implementation. Student test score gains are maintained in the second year, but we do not find any additional growth.” [xv] Sojourner and colleagues (2014) found “Exploiting district variation in participation status and timing, we find evidence that P4P-centered HRM reform raises students’ achievement by 0.03 standard deviations.” [xvi] In a more extreme application of financial incentives, characterized as “loss aversion,” Fryer and Levitt study the effect of providing teachers’ bonuses in advance and taking the money back if students do not improve sufficiently. They find that this approach “yields math test score increases between 0.2 and 0.4 standard deviations. This effect is on par with the impact of increasing teacher quality by more than one standard deviation.” [xvii]

Still missing in this literature are cost effectiveness comparisons of the alternatives. That is, if we take the same total payroll dollars and allocate those dollars traditionally across teachers with incremental differences in salaries by experience and credentials held, as opposed to implementing those salaries and bonuses by the above alternatives, along with the associated costs of the evaluation metrics used for allocating salaries, do we see differences in production of student outcomes? That is, can comparable or better outcomes be achieved where the summed costs of alternative compensation and costs of producing metrics for allocating that compensation are equal to or less than current costs?

Assertions that performance-based pay is necessarily more cost-effective than traditional salary structures also falsely assume traditional step and lane salary schedules to be monolithic. In practice, salary differentials associated with experience and credentials vary widely. Some are compressed from top to bottom, and some not. They may favor experience over credentials or vice versa. Hendricks (2015a, 2015b) explores these issues. Hedricks finds that

“Increasing salaries for teachers with 3 or more years of experience differentially retains high-ability teachers, while higher salaries for teachers with 0-2 years of experience differentially retain low-ability teachers. This likely occurs because higher early-career salaries disrupt a positive sorting process that exits among novice teachers.”[xviii]

That is, one might restructure traditional salary schedules to achieve gains comparable or greater than deeper structural changes to compensation. Hendricks also finds that changing salary structures may alter recruitment potential, and the recruiting pool:

“Overall, a 1% increase in base salary for teachers of a particular experience level increases the proportion of the targeted teachers hired by 0.04-0.08 percentage points. Pay increases have the largest effect on hire rates among teachers with 2-3 years of experience and the effect diminishes with experience. I show that higher teacher salaries provide a dual benefit of retaining and attracting a more effective distribution of teachers. Districts may also improve student achievement growth at no cost by reshaping their salary schedules so that they are increasing and concave in teacher experience.”[xix]

In the wake of growing literature and policy rhetoric asserting the inefficiency of paying teachers according to experience and credentials, a handful of new studies have surfaced revealing that the gains in student outcomes resulting from increased teacher experience may extend well beyond the first few years of experience.[xx] Thus, it would not be entirely inefficient for salaries to continue scaling upward with increased experience, especially given additional costs of implementing alternative measures on which to base salaries. Wiswall (2013) finds that:

“using an unrestricted experience model I find that for mathematics achievement there are high returns to later career teaching experience, about twice as much dispersion in initial teacher quality as previously estimated, and a pattern of negative selection where high quality teachers are more likely to exit.”[xxi]

Papay and Kraft (2015) find:

“Consistent with past research, we find that teachers experience rapid productivity improvement early in their careers. However, we also find evidence of returns to experience later in the career, indicating that teachers continue to build human capital beyond these first years.”[xxii]

Ladd and Sorensen (2014) find:

“Once we control statistically for the quality of individual teachers by the use of teacher fixed effects, we find large returns to experience for middle school teachers in the form both of higher test scores and improvements in student behavior, with the clearest behavioral effects emerging for reductions in student absenteeism. Moreover these returns extend well beyond the first few years of teaching.” [xxiii]

Perhaps most importantly, the overall efficiency and effectiveness of teacher compensation does not depend exclusively on the extent to which each dollar allocated to any and every teacher’s salary can be associated precisely with a measurable, marginal gain to the test scores of children linked with that teacher. First, benefits of schooling extend beyond short run measured achievement gains. Second, teacher compensation exists, and exerts whatever influence it may, within a complex social and economic system. Thoughtful expositions considering these complex dynamics are few and far between. Two recent examples, however, include a largely theoretical piece, supported by longitudinal descriptive data by Gilpin and Kaganovich (2011) and a recent NBER paper by Jesse Rothstein (2012).

Gilpin and Kaganovich (2011) propose a general equilibrium model of teacher quantity and quality adopting the premise that teachers’ relative wages (to other sectors) are critical to maintaining quality of teaching workforce. Additionally, compression of salaries (at the high end) may reduce retention and recruitment of talented teachers. Illustrated in their data, the long run increase in teacher quantity has led to lagging wage competitiveness, thus potentially compromising labor quality. But so too has growth in wages of competing sectors. They explain that a rise in premium for high ability will outpace that for the average even besides the effect of technological change, hence an additional downward pressure on the “real” quality of education inputs. Because of the rise in premium for high ability, Gilpin and Kaganovich assert that “Countering this trend would therefore require an increase in the share of GDP spent on basic education, assuming that the institutional setup of the school system remains unchanged.” (428) In other words, because talent is becoming more expensive more rapidly in other sectors, more investment, as of share of GDP, may be required merely to maintain education quality. That said, this theoretical exposition, while built on much the same research base as I review herein and previously, is not fully vetted in the present article.

Rothstein (2012) critiques the presumption that tying teacher pay directly to measures of performance outcomes would necessarily improve efficiency of money allocated to compensation. He explains:

Simulations indicate that labor market interactions are important to the evaluation of alternative teacher contracts. Typical bonus policies have very small effects on selection. Firing policies can have larger effects, if accompanied by substantial salary increases. However, misalignment between productivity and measured performance nearly eliminates the benefits while preserving most of the costs.[xxiv]

And so it goes – while we have some new evidence that alternative compensation methods and evaluation metrics may yield some positive results, we do not as of yet have deeper understanding of the relative cost effectiveness of alternatives. Further, we have some evidence that restructuring compensation while still based on traditional metrics (experience and credentials) may have positive effects on teacher recruitment and retention. What we do know in each case is that the overall level of teacher compensation continues to matter for recruitment of talent into the teaching profession, relative to other labor market opportunities. Further, the relative compensation of teachers across settings within labor markets continues to matter.

To summarize, despite all the uproar about paying teachers based on experience and education, and its misinterpretations in the context of the “Does money matter?” debate, this line of argument misses the point. To whatever degree teacher pay matters in attracting good people into the profession and keeping them around, it’s less about how they are paid than how much. Furthermore, the average salaries of the teaching profession, with respect to other labor market opportunities, can substantively affect the quality of entrants to the teaching profession, applicants to preparation programs, and student outcomes. Diminishing resources for schools can constrain salaries and reduce the quality of the labor supply. Further, salary differentials between schools and districts might help to recruit or retain teachers in high need settings. In other words, resources used for teacher quality matter.

NOTES

[i] Hanushek, E.A. (1971) Teacher Characteristics and Gains in Student Achievement: Estimation Using MicroData. Econometrica 61 (2) 280-288

Clotfelter, C.T., Ladd, H.F., Vigdor, J.L. (2007) Teacher credentials and student achievement: Longitudinal analysis with student fixed effects. Economics of Education Review 26 (2007) 673–682

Goldhaber, D., Brewer, D. (1997) Why Don’t Schools and Teachers Seem to Matter? Assessing the Impact of Unobservables on Educational Productivity. The Journal of Human Resources, 332 (3) 505-523

Ehrenberg, R. G., & Brewer, D. J. (1994). Do school and teacher characteristics matter? Evidence from High School and Beyond. Economics of Education Review, 13(1), 1-17.

Ehrenberg, R. G., & Brewer, D. J. (1995). Did teachers’ verbal ability and race matter in the 1960s? Economics of Education Review, 14(1), 1-21.

Jepsen, C. (2005). Teacher characteristics and student achievement: Evidence from teacher surveys. Journal of Urban Economics, 57(2), 302-319.

Jacob, B. A., & Lefgren, L. (2004). The impact of teacher training on student achievement: Quasi-experimental evidence from school reform. Journal of Human Resources, 39(1),50-79.

Rivkin, S. G., Hanushek, E. A., & Kain, J. F. (2005). Teachers, schools, and academic achievement. Econometrica, 73(2), 471.

Wayne, A. J., & Youngs, P. (2003). Teacher characteristics and student achievement gains. Review of Educational Research, 73(1), 89-122.

For a recent review of studies on the returns to teacher experience, see:

Rice, J.K. (2010) The Impact of Teacher Experience: Examining the Evidence and Policy Implications. National Center for Analysis of Longitudinal Data in Educational Research.

[ii] Some go so far as to argue that half or more of teacher pay is allocated to “non-productive” teacher attributes, and so it follows that that entire amount of funding could be reallocated toward making schools more productive.

See, for example, a recent presentation to the NY State Board of Regents from September 13, 2011 (page 32), slides by Stephen Frank of Education Resource Strategies: http://www.p12.nysed.gov/mgtserv/docs/SchoolFinanceForHighAchievement.pdf

[iii] Lankford, H., Loeb., S., Wyckoff, J. (2002) Teacher Sorting and the Plight of Urban Schools. Educational Evaluation and Policy Analysis 24 (1) 37-62

[iv] Allegretto, S.A., Corcoran, S.P., Mishel, L.R. (2008) The teaching penalty : teacher pay losing ground. Washington, D.C. : Economic Policy Institute, ©2008.

[v] Richard J. Murnane and Randall Olsen (1989) The effects of salaries and opportunity costs on length of state in teaching. Evidence from Michigan. Review of Economics and Statistics 71 (2) 347-352

[vi] David N. Figlio (2002) Can Public Schools Buy Better-Qualified Teachers?” Industrial and Labor Relations Review 55, 686-699. David N. Figlio (1997) Teacher Salaries and Teacher Quality. Economics Letters 55 267-271. Ronald Ferguson (1991) Paying for Public Education: New Evidence on How and Why Money Matters. Harvard Journal on Legislation. 28 (2) 465-498.

[vii] Loeb, S., Page, M. (2000) Examining the Link Between Teacher Wages and Student Outcomes: The Importance of Alternative Labor Market Opportunities and Non-Pecuniary Variation. Review of Economics and Statistics 82 (3) 393-408

[viii] Figlio, D.N., Rueben, K. (2001) Tax Limits and the Qualifications of New Teachers. Journal of Public Economics. April, 49-71

See also:

Downes, T. A. Figlio, D. N. (1999) Do Tax and Expenditure Limits Provide a Free Lunch? Evidence on the Link Between Limits and Public Sector Service Quality52 (1) 113-128

[ix] Ondrich, J., Pas, E., Yinger, J. (2008) The Determinants of Teacher Attrition in Upstate New York. Public Finance Review 36 (1) 112-144

[x] Hanushek, Kain, Rivkin, “Why Public Schools Lose Teachers,” Journal of Human Resources 39 (2) p. 350

[xi] Clotfelter, C., Ladd, H.F., Vigdor, J. (2011) Teacher Mobility, School Segregation and Pay Based Policies to Level the Playing Field. Education Finance and Policy , Vol.6, No.3, Pages 399–438

Clotfelter, Charles T., Elizabeth Glennie, Helen F. Ladd, and Jacob L. Vigdor. 2008. Would higher salaries keep teachers in high-poverty schools? Evidence from a policy intervention in North Carolina. Journal of Public Economics 92: 1352–70.

[xii] For major studies specifically on the topic of “merit pay,” each of which generally finds no positive effects of merit pay on student outcomes, see:

Glazerman, S., Seifullah, A. (2010) An Evaluation of the Teacher Advancement Program in Chicago: Year Two Impact Report. Mathematica Policy Research Institute. 6319-520

Springer, M.G., Ballou, D., Hamilton, L., Le, V., Lockwood, J.R., McCaffrey, D., Pepper, M., and Stecher, B. (2010). Teacher Pay for Performance: Experimental Evidence from the Project on Incentives in Teaching. Nashville, TN: National Center on Performance Incentives at Vanderbilt University.

Marsh, J. A., Springer, M. G., McCaffrey, D. F., Yuan, K., Epstein, S., Koppich, J., Kalra, N., DiMartino, C., & Peng, A. (2011). A Big Apple for Educators: New York City’s Experiment with Schoolwide Performance Bonuses. Final Evaluation Report. RAND Corporation & Vanderbilt University.

[xiii] Yuan, K., Le, V. N., McCaffrey, D. F., Marsh, J. A., Hamilton, L. S., Stecher, B. M., & Springer, M. G. (2012). Incentive Pay Programs Do Not Affect Teacher Motivation or Reported Practices Results From Three Randomized Studies. Educational Evaluation and Policy Analysis, 0162373712462625.

Springer, M. G., Ballou, D., Hamilton, L., Le, V. N., Lockwood, J. R., McCaffrey, D. F., … & Stecher, B. M. (2011). Teacher Pay for Performance: Experimental Evidence from the Project on Incentives in Teaching (POINT). Society for Research on Educational Effectiveness.

Springer, M. G., Pane, J. F., Le, V. N., McCaffrey, D. F., Burns, S. F., Hamilton, L. S., & Stecher, B. (2012). Team Pay for Performance Experimental Evidence From the Round Rock Pilot Project on Team Incentives. Educational Evaluation and Policy Analysis, 34(4), 367-390.

[xiv] Dee, T. S., & Wyckoff, J. (2015). Incentives, selection, and teacher performance: Evidence from IMPACT. Journal of Policy Analysis and Management, 34(2), 267-297.

[xv] Balch, R., & Springer, M. G. (2015). Performance pay, test scores, and student learning objectives. Economics of Education Review, 44, 114-125.

[xvi] Sojourner, A. J., Mykerezi, E., & West, K. L. (2014). Teacher Pay Reform and Productivity Panel Data Evidence from Adoptions of Q-Comp in Minnesota. Journal of Human Resources, 49(4), 945-981.

[xvii] Fryer Jr, R. G., Levitt, S. D., List, J., & Sadoff, S. (2012). Enhancing the efficacy of teacher incentives through loss aversion: A field experiment (No. w18237). National Bureau of Economic Research.

[xviii] Hendricks, M. D. (2015). Public Schools Are Hemorrhaging Talented Teachers: Can Higher Salaries Function as a Tourniquet?. Available at SSRN 2564703.

[xix] Matthew D. Hendricks, Towards an optimal teacher salary schedule: Designing base salary to attract and retain effective teachers, Economics of Education Review (2015), doi: 10.1016/j.econedurev.2015.05.008

[xx] For a review of much the same literature, see: http://www.shankerinstitute.org/blog/recent-evidence-teacher-experience-and-productivity

[xxi] Wiswall, M. (2013). The dynamics of teacher quality. Journal of Public Economics, 100, 61-78.

[xxii] Papay, J. P., & Kraft, M. A. (2015). Productivity returns to experience in the teacher labor market: Methodological challenges and new evidence on long-term career improvement. Journal of Public Economics.

[xxiii] Ladd, H. F., & Sorensen, L. C. (2014). Returns to teacher experience: Student achievement and motivation in middle school. Center for Analysis of Longitudinal Data in Education Research Working Paper, 112.

[xxiv] Rothstein, J. (2012). Teacher quality policy when supply matter. Documents de treball IEB, (35), 1-65.

Rothstein, J. (2012). Teacher quality policy when supply matters (No. w18419). National Bureau of Economic Research.

A Reply from Matt Barnum:

Nice post. I certainly agree with a lot of your points here – particularly on the importance of a strong base salary and some of the issues around cost effectivness- but I’m more optimistic about alternative, partially performance-based compensation than you. Here’s why:

Retention/recruitment: You don’t get into it but there is evidence that (not too surprisingly) performance pay will improve the retention of teachers deemed effective. This to me is the primary goal and benefit of performance pay. See: http://www.tnconsortium.org/data/files/gallery/ContentGallery/Effective_Teacher_Retention_Bonuses_Evidence_from_TN.pdf and http://epa.sagepub.com/content/36/1/67.

This one’s trickier to prove causality, but there’s also research suggesting performance pay helps recruit more qualified applicants to teaching (albeit by the pretty crude measure of SAT scores): https://aefpweb.org/sites/default/files/webform/Teacher%20Selection%2011-17-11.pdf

TN/NY studies: I generally don’t put too much stock in these studies, well designed as they were. They measure a very narrow aspect – effort – of how performance pay can improve outcomes. I strongly suspect that if we ran the same experiment but with base pay increases being the treatment, we would find similar null results. And yet as you document base pay matters a great deal.

Cost effectiveness: This is a big question mark as you say. Sojourner et al found the MN program was highly cost effective based on its social benefits but didn’t compare it to alternative interventions. The Talent Transfer Initiative study (http://www.mathematica-mpr.com/our-publications-and-findings/publications/evaluation-of-the-teacher-incentive-fund-implementation-and-impacts-of-payforperformance-after-two) which paid effective teachers to transfer schools, found the program cost effective relative to class size reductions at the elementary school level, but not in middle schools. Rothstein’s paper that you cite found that performance pay would be cost effective relative to CSR, though as you point out his interpretation was one of skepticism regarding whether the performance metrics could be appropriately utilized.

I actually think the best evidence may be the recent study on TIF (http://www.mathematica-mpr.com/our-publications-and-findings/publications/evaluation-of-the-teacher-incentive-fund-implementation-and-impacts-of-payforperformance-after-two) which found (very) small gains in achievement for schools that used performance pay relative to schools that raised pay across the board. This suggests that performance pay may be preferable to broad based raises (at least in the short term).

Master’s degrees: You don’t get into this issue but another study recently came out in the long drip-drop of research that has pretty consistently found master’s degrees have virtually no measurable effect on teacher performance: http://www.caldercenter.org/publications/do-master’s-degrees-matter-advanced-degrees-career-paths-and-effectiveness-teachers

Experience: I think the recent studies on experience have been really interesting and important, though I’m not quite convinced they’re enough to change conventional wisdom on most gains coming in the first couple years. McGee+Winters also have a good point on this issue:

“Such papers demonstrate that the gains to experience from later years are disguised by selection bias, whereby more effective experienced teachers are more likely to exit the classroom than less effective teachers. While such papers offer evidence of quality returns to late- career experience for teachers who remain in the classroom, the papers do not dispute the assertion that quality differences, between more and less experienced teachers in the same school district, essentially plateau after five to seven years”.

(http://www.manhattan-institute.org/pdf/cr_104.pdf)

The Winters/McGee paper also finds that including pensions into salary significantly raises the extent to which experience is rewarded through salaries. Fitzpatrick shows that teachers value pension compensation at 20 cents on the dollar: https://www.aeaweb.org/articles.php?doi=10.1257%2Fpol.20140087

I agree with your point that tests aren’t the only thing that matters here, though it’s not clear which way that cuts. Jackson found zero benefits of experience in his estimates of teacher impacts on non-cognitive outcomes: http://www.nber.org/papers/w18624. On the other hand, the Ladd/Sorensen study you cite finds large gains to experience when it comes to teachers’ impact on student attendance; Gershenshon also finds positive returns to experience though they’re smaller than Ladd/Sorensen (http://nebula.wsimg.com/d7c78771b96568a0cf214566fbab09e6?AccessKeyId=33C759F2990E6F78DB85&disposition=0&alloworigin=1). We would definitely benefit from more research on this point.

In sum, I think there is good reason to be cautiously optimistic about alternative compensation systems in comparison to the traditional models. The cost effectiveness/alternatives issue is still very much an open empirical question as you say, but I think there are good theoretical reasons to expect performance pay to win out. Again, your summary was very thoughtful, and I agree with parts of it, but I thought it might be useful to share the perspective of someone who looks at the same evidence but coming to different conclusions.

Quick response, from me:

I have actually addressed the Master’s issue a few times on the blog:

https://schoolfinance101.wordpress.com/2010/11/05/bump/

https://schoolfinance101.wordpress.com/2013/10/06/paying-economists-by-hair-color-thoughts-on-masters-degrees-teacher-compensation/

I also realistically view teacher compensation structures as the ugly/imperfect output of a necessary negotiation process, somewhat like school finance formulas. They will always be imperfect, and some players/groups in the system will get “more than they should” (an inefficient, or seemingly inefficient allocation) as political tradeoff, but that the system still requires a process of deliberation/negotiation among parties. In the best case, reasonable technical/research evidence is introduced into those negotiations and helps to shape the output. One of my arguments is that traditional step and lane salary schedules are not entirely inefficient, as Hanushek argues (at the extreme), because a) the steps are tied primarily to experience which does matter, even beyond the first few years, and b) implementing these salary schedules at scale is cheap… because it depends on easy to measure/obtain proxies like experience and education (where the master’s degrees may be as much about how many positions you can play as they are about whether you play your one position well). Is it the tightest link? No. BUT, a) establishing a really tight link between each additional dollar allocated to salary and “outcomes” requires knowing what the hell those outcomes really ought to be, b) figuring out how to measure them and c) efficiently integrating them into a compensation model. At some point, the imperfect proxies start looking good again. That said, as my post points out, I’m open to thoughtfully negotiated alternative compensation schemes, including those that incentivize teaching in high need schools and differentiation by area of expertise (based on external labor market pressures).

Imposing some supposed technocratic ideal won’t work, because the technocrats are responsive to political forces (and political money) as well, and often are as imbalanced ideologically (though perhaps along different ideological spectrum) or even more imbalanced than the negotiation process.

As for VAM vs. other measures… I actually don’t address the others, but view them with comparable skepticism. It’s all messy (and we can’t evaluate the usefulness of others, versus VAM, by which predicts next years VAM better. VAM will win that one, as it did in Gates MET).

The key is that personnel decisions are made in messy contexts and have to involve human judgment involving a number of angles. (see this post: https://schoolfinance101.wordpress.com/2011/07/22/teacher-selection-smart-selection-vs-dumb-selection/)

It’s not just about selecting or dumping the teacher who may or may not generate a marginal test score gain in X subject or self contained classroom the following year (the classic circular validity test of VAM).
In making actual personnel decisions, there’s the question of whether there’s a likely better candidate pool waiting in line, or whether the individual plays other key roles in the school, etc. It’s not just about the likelihood (albeit very noisy) that the same teacher with similar kids the next year can produce marginally better gains than his/her peers. Policy mandates or even localized matrices with mindless application of cut scores thwarts thoughtful personnel decisions. And yes, a totally incompetent administrator can thwart thoughtful personnel decisions too. But I would assert that forcing that person to apply some matrix won’t help much (may be a last resort where administrative incompetence can’t be overcome, or replaced).

BUT, that’s where VAM data (from multiple specifications, perhaps cranked through some useful visualizations) can help administrators in large enough districts to identify problem areas… such as lagging algebra performance in a subset of schools, or with a subset of teachers. That noisy screen can be used for follow up action… which might yield insights about the actual teacher/teaching/quality, or something else that’s going on. It may lead to personnel related actions, curricular changes, or whatever. Great possibilities if used wisely/thoughtfully.
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