ESRC SDAI DfE Highlight Notice: The Effects of Teacher Pay Reforms on Teacher Pay, Teacher Careers and Student Attainment (Invited Resubmission)

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Delivering good education means attracting and incentivising good teachers to perform well and remain in the profession. Ofsted and the National Audit Office (NAO) have highlighted problems recruiting teachers and developing attractive career paths for those entering the profession. Centralised pay determination is deemed part of the problem since it is unable to respond to workers' outside options in local labour markets (Britton and Propper 2016). In 2012 the School Teachers' Review Body (STRB) argued: "The current pay system is rigid, complex and difficult to navigate and does not support schools to recruit the high-quality teachers or leaders" (DfE 2012). It recommended increased flexibility in determining teacher salaries and greater discretion in teacher recruitment and retention. It also recommended linking teacher pay to excellence and performance improvement, with higher rewards and more rapid progression for the most able teachers. The reforms came into effect in 2013 for new teachers and for all in 2014 (STRB, 2013) and provided "maintained" schools with powers Academies already had. There is currently no evidence on its effects on schools, teachers or student attainment. This study will fill this gap in knowledge, and will assess to what degree the reform can help recruit and retain teachers.It is unclear what impact the reforms might have had. First, there is little evidence regarding the value of performance pay (PP) in the public sector. The literature linking PP to increased output via worker sorting and incentive effects relates mainly to for-profit activities. The sorting and incentive effects of PP are less certain for public sector professionals where intrinsic motivation plays an important part in occupational choice and worker effort (Burgess and Metcalfe, 2000). Traditionally teachers have been rewarded through career incentives based on incremental pay progression and promotion (Prendergast, 1999: 10). Schools may wish to stick to "tried and tested" approaches given difficulties appraising the benefits of changing. On the other hand, schools may act in the knowledge that research indicates that the pay of teachers relative to other professions is an important factor in attracting high ability workers to teaching (Dolton and Marcenaro-Gutierrez, 2011). More broadly, there is no reason to suspect that efficiency wages should not affect worker effort and labour turnover in public sector occupations just as they do in the private sector.Our study will compare the school-level distribution in teacher pay pre- and post-reforms, and whether this varies by school, teacher and regional characteristics. Using estimates of pay levels under the pre-reform regime to capture counterfactual wages, we will develop statistical tests to identify the schools changing their pay setting behaviour and compare them to those that did not. This classification of schools will allow us to examine the impact of the pay reforms on schools' ability to fill teacher vacancies, on the entry wages of new hires, wage progression among incumbents and teacher mobility within and across schools. We will consider the effects of the pay reforms on teacher retention and investigate whether the pay reforms changed teacher characteristics through effects on those entering and leaving the profession. Finally, we will examine how the pay reforms may have affected average student attainment at the school level.The findings will interest policy makers concerned with the implementation and effects of the teacher pay-reform, academics interested in (de)centralised pay structures and PP in the public sector and educationalists with a focus on teacher labour markets. The results may also affect school leaders' propensity to depart from "tried and tested" pay practices to manage their school's workforce.