Salary Incentives and Teacher Quality: The Effect of a District-Level Salary Increase on Teacher Retention

Teacher retention is an important goal for urban school districts. In an effort to improve teacher retention, one popular strategy is to raise teacher salaries, often in targeted areas. However, there is little evidence on whether salary increases can improve retention in urban schools and districts Moreover, there is even less evidence on whether such salary incentives can be effective in retaining the most highly-effective teachers. Studying a policy in the San Francisco Unified School District, the author investigates whether teacher retention increased for those teachers targeted by salary increases. The author shows that teacher retention did increase in the time period, but that increases are most likely due to the economic downturn that occurred simultaneously. Teachers who were targeted for overall salary increases did not have a differential increase in retention rates, indicating that the increases in retention rates were driven by economic changes rather than by the policy.