Association for Public Policy Analysis & Management

Traditionally, teachers have been paid according to fixed salary schedules, with wages determined solely by years of experience and educational attainment.  Given variation in the opportunity cost of teachers and in the non-pecuniary characteristics of jobs, the fixed salary schedules have led to chronic shortages of teachers in particular subject areas, such as math, science and special education.  An obvious solution would be to raise the wages of math, science and special education teachers relative to the wages of other teachers.  Little is known, however, about the impact differential pay would have on the supply of new teachers and the retention of existing teachers.  In this paper we analyze the effects of Georgia’s differential pay system for early career math and science teachers, the only statewide differential pay system based on subject area that currently exists.  The program began in 2010/11 and covers teachers who are certified and teaching math or science in grades 6-12 and have less than six years of teaching experience.  We exploit the variation in program coverage over time as well as the multiple eligibility criteria to estimate difference-in-differences models of teacher retention and teacher qualifications.  We also produce interrupted time-series estimates of the effect of differential pay on the likelihood of majoring in math or science education and the probability of becoming a secondary math or science teacher.  In addition, we provide qualitative evidence on the relationship between differential pay and teacher effectiveness (value-added).  Our analysis sample includes the universe of public school teachers and students in Georgia for the years 2006/07 through 2014/15.  Individual-level teacher and student data come from Georgia’s new longitudinal database, GAAWARDS.