Policymakers across the country have fretted about a new wave of potential teacher shortages, particularly in certain subjects and schools. Now a new study offers a straightforward solution: give bonuses or provide loan forgiveness to teachers in positions that are hard to staff.
This conclusion, reached in research recently published in the Journal of Policy Analysis and Management, is perhaps unsurprising, but it’s an approach that apparently few districts have adopted.
The peer-reviewed study, conducted by Li Feng and Tim Sass, focuses on Florida, which put in place student loan forgiveness and bonus programs in order to retain teachers and prevent shortages. Beginning in the 1980s, teachers in identified shortage areas — most frequently in math, science, foreign language, and special education — could receive up to $10,000 over four years to repay loans. The state also offered a one-time retention bonus of up to $1,200 for teachers with satisfactory performance ratings in shortage subjects during the 2000–2001 school year.
To isolate the effects of the initiatives, the researchers use data from 1995 through 2013 to examine retention among teachers who were eligible for bonuses or loan forgiveness versus those who were ineligible. In short, the programs seemed to make a difference.
“We find that loan forgiveness and targeted bonuses can both substantially reduce teacher attrition in high-need areas, although bonuses appear to have a larger impact in the short run,” Feng and Sass write. “Both loan forgiveness and bonuses appear to be cost-effective policies.”
The loan forgiveness program reduced teachers’ likelihood of quitting by about 10 percent annually. The impacts were even larger for the one-time bonus program, cutting teacher turnover by nearly a third in the year it was implemented. That means the chance teachers quit after their first year fell from 17 percent to roughly 11 percent if they received a bonus or to about 15.3 percent if they were eligible for a loan subsidy.
“A one-time bonus of $1,200 reduced teacher attrition more than loan repayments of comparable magnitude,” the study concludes.
Did the retention efforts keep quality teachers? It’s hard to say definitively, but the researchers were able to measure the effectiveness of middle school and high school math and certain special education teachers. Generally, loan recipients were as good or better than teachers who didn’t participate in the program.
The programs may also have been beneficial because teachers generally improve with experience and it can be expensive to recruit new teachers. The bonuses and loan forgiveness of course did cost money — the loan subsidies amounted to about $3 million annually and the retention bonuses cost $60 million — but the researchers estimate that they were worth the price, particularly the one-time bonus.
A few important caveats: the study focuses on fairly old programs, and it doesn’t examine their longer-run impacts after the financial incentives ended.
“The bonus may have induced teachers to stay in the public school system an additional year, but may not have significantly affected long-run career plans,” the researchers write.
The effectiveness of the program also varied somewhat by subject area and payment size. For example, effects were significant for special education teachers only when loan forgiveness amounts were relatively large, about $2,500.
Still, the study cuts against the idea that money can’t itself incentivize teachers to stay in the classroom, showing that even relatively modest increases in pay can make a difference.
This dovetails with other literature showing that pay really does matter for who enters and stays in teaching. Another recent study found that districts with performance pay recruited more teachers from academically high-achieving colleges. Other research has found that hard-to-staff and performance bonuses can increase retention rates, and that higher across-the-board pay can draw more people into the profession and get them to stay.
But policymakers don’t seem to be heeding these findings.
According to federal statistics, as of the 2011–12 school year, only about 13 percent of school districts used pay incentives to attract and retain teachers in shortage areas. Meanwhile, overall teacher pay has fallen relative to other professions. And what about Florida, where we now know the loan forgiveness program was effective?
The state legislature terminated the initiative in 2011.
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