Merit pay for teachers can raise test scores

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The right kind of merit pay program for teachers can boost student test scores, research suggests.

Teacher merit pay, also known as incentive pay, performance pay, and pay-for-performance, offers financial incentives to teachers who meet certain criteria, usually involving improved student test scores.

Despite substantial opposition on several fronts, teacher merit pay programs are growing in popularity with considerable political and financial support. The federal government has awarded more than $2 billion in more than 30 states to design and implement performance pay systems.

Under this spotlight, numerous research studies have been conducted over the last decade to evaluate merit pay’s effectiveness. For the new report, the authors searched through more than 19,000 research reports before focusing on 44 primary studies.

“We found overall that the presence of a merit pay program was associated with a modest, but statistically significant, positive effect on student test scores,” says Matthew G. Springer, assistant professor of public policy and education at Vanderbilt University’s Peabody College of education and human development, who co-led the report with doctoral students Lam D. Pham and Tuan D. Nguyen.

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“Approximately 74 percent of the effect sizes recorded in our review were positive. The influence was relatively similar across the two subject areas, mathematics and English language arts.”

Among studies conducted in US schools, the academic increase was roughly equivalent to adding three additional weeks of learning to the school year, Springer says.

“These general findings continue to hold even when we restrict our analysis to those studies utilizing the most rigorous methods,” Nguyen adds.

Not all merit pay programs yielded equal results, however. Program impacts varied depending on the design of the incentive pay scheme. For example, merit pay programs rewarding teams of teachers produced an effect almost twice as large those rewarding merit raises on rank-order. That finding lends support to the shared nature of teaching and learning in schools.

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“We found that effect sizes were highly sensitive to program design and study context,” Pham says. “This suggests that, while some merit pay programs have the potential to improve student test scores in some contexts, the more pertinent question that researchers and policymakers should consider is how the program is structured and implemented.”

Emerging studies also suggest that merit pay can improve teacher recruitment and retention, which has been found to contribute to many positive outcomes for students, particularly those in low-income areas.

Springer suggests continued investigation into teacher labor market outcomes, especially the effects of pay incentives on the mobility patterns of highly effective teachers, and the exit decisions of traditionally low-performing teachers.

Source: Vanderbilt University