I don’t like the term “merit pay” in the education sphere—no school district I’m aware of pays all its teachers equally, and nobody runs around saying things like “I think disparate financial rewards should be handed out for no reason.” Typical teacher compensation schemes pay more money to teachers with more degrees, and also pay more money to teachers with more years of experience. Presumably the thinking here is that a more experienced teacher is more valuable than a less-experienced teacher, so it makes sense to pay the more experienced teacher more. But as Chad Alderman points out, the research on teacher effectiveness both vindicates this theory and suggests we should tweak it substantially:
To show what this looks like, I’ve graphed teacher salaries in four DC-area suburban districts (Montgomery and Prince George’s Counties in Maryland and Fairfax and Prince William Counties in Virginia) with average teacher effectiveness scores in mathematics. The effectiveness scores are value-added measures that compute a teacher’s ability to maintain or increase student scores on standardized tests of achievement. They are graphed according to differences from the average teacher, and they come from a recent paper which found effectiveness scores in line with prior research.
The maroon bars represent salaries for fully certified teachers with bachelor’s degrees only, and the blue bars are average salaries for fully certified teachers with Master’s degrees only. As the chart shows, salaries in these four districts increases almost linearly, although they grow much faster after teachers have 14 or 17 years of experience than when they have only a few.
On the other hand, teacher effectiveness makes nearly all of its gains in a teacher’s first two years on the job. They are barely more effective at 25 years in as they were after two or three, and no more effective at 22 than they were at four.
This suggests that the experience bonuses earned by teachers should be much more front-loaded. In particular, a young teacher with five years on the job is set to be badly underpaid by the current formula—for all intents and purposes she’s an experienced teacher who’s going to be much better at her job than the typical new recruit, and roughly as good as someone with 15 or 25 years on the job.