How Higher Teacher Pay Leads to Better Student Outcomes
The relationship between teacher compensation and student achievement has been extensively studied, and the evidence is clear: paying teachers more leads to measurable improvements in student outcomes.
This connection operates through both direct effects on achievement and indirect mechanisms involving teacher quality and retention. This is the driving force behind The Educator Fund! Let’s look at the data.
Direct Effects on Student Achievement
Mo Money = Mo Success
Countries with higher average salaries for experienced teachers are more likely to have higher national achievement.
Research consistently shows that higher teacher salaries are correlated with improved student performance across multiple metrics. Countries with higher average salaries for experienced teachers are more likely to have higher national achievement, according to a comprehensive cross-national analysis examining 30 countries using Organisation for Economic Co-operation and Development (OECD) and Programme for International Student Assessment (PISA) data. This pattern holds true at more granular levels as well. In the United States, both mathematics and English test scores are significantly higher in districts that offer higher base salaries to teachers, based on nationally representative data.
The magnitude of these effects is substantial. Studies have found that increasing teacher pay by 10% reduces dropout rates by 3% to 4%, resulting in thousands of students completing their education rather than leaving school prematurely. Perhaps most importantly, higher teacher compensation helps address educational inequities. Higher teacher base salaries reduce the achievement gap between white and black students, as well as between white and Hispanic students, by raising test scores more for those minority students. This suggests that strategic investments in teacher pay could serve as a powerful tool for promoting educational equity. This is a significant reason why we are partnering with the Wesley International Academy (predominantly serving the black community). We believe all students should be given ample opportunities to excel.
The Mechanism: Teacher Quality and Retention
Understanding why higher pay improves outcomes reveals three interconnected pathways that explain this relationship.
Competitive salaries attract higher-quality candidates to the teaching profession. Higher teacher pay attracts people with higher cognitive skills. When teachers possess higher cognitive skills, their students tend to perform better academically, according to a new study that compared data from 31 countries. Currently, U.S. teachers are paid 22 percent less than comparably experienced and skilled college graduates doing other jobs, which deters many high-achieving students from considering teaching as a career. We are seeking to change that! When teacher salaries become more competitive, schools can recruit from a stronger pool of candidates, directly benefiting student learning.
Adequate compensation dramatically reduces teacher turnover. The evidence here is particularly compelling. Paying math, science, and special education teachers in high-poverty schools $1,800 bonuses (about $2,500 adjusted for inflation) reduced teacher turnover by 17%. More broadly, increasing teacher pay is effective in retaining teachers who would have otherwise been replaced by relatively inexperienced teachers. In fact, districts where teachers could expect to one day earn around $78,000 had a turnover rate that was 31 percent lower than those districts where salaries were lower. Keep in mind, our objective is to pay skilled, eligible teachers $10,000 more, indefinitely.
Retention matters because teacher effectiveness increases with experience, and high turnover disrupts student learning. Research indicates that high teacher turnover results in significant declines in the academic performance of middle school students, particularly in reading and mathematics. When schools can retain experienced teachers through competitive compensation, students benefit from the accumulated expertise and established relationships that veteran educators bring to the classroom.
In Summary: Higher Pay = Better Student Outcomes
The evidence overwhelmingly supports increasing teacher compensation as a sound investment in educational quality. Through attracting talented professionals and reducing costly turnover, higher teacher pay creates conditions for sustained student achievement and helps build a more equitable education system. And building a better education system is what The Educator Fund is all about.
