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

Lead Research Organisation: University College London
Department Name: Quantitative Social Science

Abstract

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.

Planned Impact

This project will inform policy on teacher pay, with associated benefits for teacher incentives, retention of good teachers and, thus, the quality of teaching in schools. As such, the findings will ultimately be important for pupils, parents, teachers, school governors, and head teachers, although this impact will be indirect through changes to policy and practice via the channels we discuss below. For pupils and parents, the aim of a better-informed policy on teacher pay is fundamentally about improving the quality of teaching and, thus, pupil performance. For school governors and head teachers, better teacher pay practices are about improving staff recruitment, retention and motivation at their schools.

We have identified four key groups on whom we wish to have impact. In addition to the academic beneficiaries already mentioned, the chief beneficiaries of this research will be policy makers, primarily in the Department for Education; schools, academy chains and local authorities (i.e. employers of teachers); and trade unions representing teachers and head teachers.

Policy makers: Civil servants and ministers within the Department for Education (DfE) are likely to find the research findings particularly relevant, especially those relating to the impact of the reforms on teacher pay, pay dispersion, pay progression and teacher mobility and sorting, and student outcomes. We have already approached Tim Leunig, policy adviser at DfE, who has intimated that the DfE would be keen to provide a representative for a stakeholder advisory group if the project is funded.

Schools, Academy Chains and Local Authorities (Employers): Our findings will be of considerable interest to schools, academy chains and local authorities, allowing them to make more informed decisions about whether to deviate from prior pay setting models and what the consequences of such decisions might be. Representatives from these groups, or representative bodies such as the Local Government Association, will be invited to the one day impact workshop. We also expect to reach this group through our planned media outputs.

Trade Unions: Trade unions representing teachers and head teachers have expressed deep concern about the impact of incentive pay on wages and fairness at work, so will be interested in the impacts of increased teacher pay flexibility. Bryson has a close relationship with the TUC and is currently undertaking research for them on the impact of unions on employers and employees. Bryson has recently met with NUT's Deputy General Secretary to discuss the value of new data sources in establishing what is happening to teacher pay and careers. Our study will feed into policy formation at the TUC and its affiliate unions.

The one day workshop planned for month 12 of the study will bring together these practitioner and policy beneficiaries with academics in the field to discuss early findings from the study and their implications for policy and practice.

Publications

10 25 50
 
Description We have generated significant new knowledge on the topic of the pay reforms and the teacher labour market. Our initial descriptive analysis of the data suggest a moderate upward change in teacher pay post-reform for both primary and secondary schools, arresting a downward trend in teacher pay in the pre-reform period going back to 2010. In contrast there has been minimal change in the variance of teacher pay across or within schools, for either primary or secondary teachers, between pre- and post-reform.

We employ a data driven approach to identify different types of school-level responses to the pay reforms. We use a novel data strategy for identifying which schools adopted flexible pay and the extent to which they adopted it. Our approach improves on previous studies attempting to identify whether schools adopted pay flexibility in two primary ways: (i) We separately identify both 'on-spine point' adopters of pay flexibility, which are schools that maintain the use of (union-designated) spine points post-reform, but primarily utilise flexibility by either 'holding back' or accelerating pay progression through the spine points, and 'off-spine point' adopters, which are schools that take advantage of new freedoms to pay teachers a wage in-between (union-designated) spine points post-reform; (ii) Our measure of adoption incorporates flexibility exhibited on both the main and upper teacher pay scales. Previous authors have failed to capture both types of flexibility outlined in point (i), and have only used the main pay scale, whereas we show non-trivial adoption of flexibility occurring within the upper pay scale, justifying point (ii).

With this approach we find that around 2/3 of schools adopted pay flexibility in both primary and secondary schools, with the majority of those being on-spine point adopters, suggesting that the adoption of pay flexibility in response to the reforms was more widespread than previously thought. We show that teacher, pupil and school-level characteristics (including labour market competition posed by other nearby schools) do not contribute significantly to predicting whether schools adopt flexibility or not, whereas differences between the local authorities to which schools belong explain much more of the variance in school-level adoption.

We find that both on-spine and off-spine adopter schools lower teacher wages relative non-adopter schools, by between 2-3% in both primary and secondary schools. The decline in pay is similar for white British and minority teachers but slightly larger (smaller) for women in secondary (primary) schools. This signals some selection effects as the share of male teachers in adopter secondary (primary) schools increases (decreases) relative to non-adopter schools. It is alarming that the share of qualified teachers slightly decreases and this change is significant in primary schools. Both on-spine and off-spine adopter schools experienced a slight reduction in teacher numbers and retention relative to non-adopters. We found no effects on pupil attainment for either adopter group compared to non-adopter for both primary and secondary schools. Previous studies estimated a fall in pay and a slight reduction in teacher numbers as we do, but in contrast to our analysis find a decline in (secondary) pupil attainment. However unlike these previous studies we explicitly address known measurement issues in the attainment data that are present over the analysis timeframe.
Exploitation Route There are four primary ways in which this work can be taken forward.

The first two avenues relate to the fact that we show that reductions in the price, and (to some degree) quantity, of teachers were achieved while pupil attainment remained constant. This implies that schools experienced an increase in productivity as a result of their adoption of flexibility in response to the reforms. Thus, first, future work could consider whether schools increased efficiency in their production of pupil outcomes by possibly diverting resources to other productivity-enhancing activities. Second, future work could examine whether schools have been able to exploit imperfect competition in the teacher labour market, meaning they have been able to cut the price of teachers without having to worry about significant labour retention or quality issues.

Third, although we find that local authorities explain almost all of the variation in school-level adoption of pay flexibility, we are yet to determine why. We find that differences in local authority level financial positions and expenditure portfolios, and differences in local authority guidance on teacher pay, does not explain much of the power of local authorities in predicting school-level adoption. More work is thus needed to understand why local authorities have such a role.

Finally, given that our work suggests the possibility of imperfective competition in the teacher labour market, (i.e. possible monopsony power), future work could consider whether the teacher pay reforms and the subsequent adoption of pay flexibility served to widen the gender wage gap, which is predicted by theory. Indeed our evidence suggests that women in secondary schools experienced a slightly stronger pay cut compared to men amongst schools that adopted pay flexibility.
Sectors Education,Government, Democracy and Justice,Other

URL https://www.ucl.ac.uk/ioe/departments-and-centres/centres/quantitative-social-science/effects-teacher-pay-reforms-teacher-pay-teacher-careers-and-student-attainment
 
Description Both the interim and late-stage findings from this project are helping to shape the understanding of policymakers of the impact of the teacher pay reforms. Our work was received with great interest at the School Teachers Review Body (STRB) annual strategy meeting, with the STRB requesting updates from our project on an ongoing basis. On the back of our end-of-project conference in Feb 2022, we have been invited by the STRB to present final findings before the next 'pay round' for 2022, as a way for STRB members to review the evidence base for the forthcoming round. The STRB provides annual recommendations to the government on policy related to teacher pay, thus our work is and will continue to influence best practice in this area. Our invitation back to present our work to the STRB is particularly relevant at this time, as the STRB has recently recommended the re-introduction of advisory pay points. Our final findings have direct relevance for how this re-introduction might be applied in practice, and we welcome another opportunity to directly inform national policy at such a key moment. Through our advisory groups and end-of-project conference we have directly influenced the understanding and practice of policymakers, educational practitioners and trade unions. At our three advisory groups where we presented interim findings and research summaries, and facilitated rich discussions of both the interpretation and implications of our findings, we hosted delegates from the Department for Education (DfE), STRB, Department for Business, Energy and Industrial Strategy, Office of Manpower Economics, Education Policy Institute, National Governors Association (NGA), National Union of Teachers (NUT), National Education Union (NEU), National Association of Head Teachers (NAHT), and the Association of School and College Leaders (ASCL). Policymakers, and particularly civil servants working on school workforce issues within the DfE reported the importance of our findings with respect to the impact of the reforms on teacher pay itself. Delegates representing schools and school leaders such as NGA, NAHT and ASCL, reported that our work was relevant for schools and leaders in making informed and appropriate choices regarding whether, and how, to deviate from prior pay setting models, incorporating the understanding that our findings provided on the consequences of such decisions. And our findings confirmed some of the concerns of the trade unions represented at our meetings (NUT, NEU) that schools were able to cut teacher pay in response to the reforms without having to worry significantly about retention rates, due to the imperfect competition within the teacher labour market, and that these pay penalties associated with the reform were larger for women (in secondary schools). In addition to these representatives attending ongoing advisory groups throughout the term of the project, our end-of-project conference further included Anna Vignoles, director of the Leverhulme Trust, as a key discussant, and Tim Leunig a former policy advisor at the DfE, both of whom expressed support for the project and the findings in terms of their relevance to the current policy landscape on teacher pay and teacher labour markets. Now that we have completed the core of our analyses, and off the back of our end-of-project conference where we presented these findings, we have been invited to contribute a 1200 word double page article to the The Headteacher magazine, by the editor, Dorothy Lepkowska. We will be delivering this by the end of March, and we expect publication in summer 2022. We are also now ready to contribute an article to the Conversation UK and the UCL IoE blog, both with a strong multi-disciplinary audience. We have kept an ongoing online presence via our project website - https://www.ucl.ac.uk/ioe/departments-and-centres/centres/quantitative-social-science/effects-teacher-pay-reforms-teacher-pay-teacher-careers-and-student-attainment - which has been hosted within the UCL IOE faculty website. The faculty website receives approximately 15,000 unique users per week making this a better way of attracting visitors than a standalone site, especially as it allows promotion of news items and events from the project on faculty- or university-wide pages, which we have been continually updating.
First Year Of Impact 2019
Sector Education,Government, Democracy and Justice
Impact Types Societal,Policy & public services

 
Description Presentation at the School Teachers' Review Body (STRB) annual strategy meeting
Geographic Reach National 
Policy Influence Type Gave evidence to a government review
 
Description 13/03/20: Presentation at the Society for Research on Educational Effectiveness 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Professional Practitioners
Results and Impact Date: March 13th 2020
Year(s) Of Engagement Activity 2020
 
Description 25/06/20: EALE SOLE AASLE World Conference 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Professional Practitioners
Results and Impact Date - 25/06/20
Year(s) Of Engagement Activity 2020
 
Description Advisory Group 
Form Of Engagement Activity A formal working group, expert panel or dialogue
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Professional Practitioners
Results and Impact This advisory group was convened to disseminate initial project findings to our major stakeholders and academics6, and to invite them to provide feedback on our methodological approach and its application, provide professional insights to assist the interpretation of key findings and to offer ideas for broader dissemination activities. There were 8 people in total, and the feedback and insight provided was hugely valuable, particularly in tackling some of the methodological challenges of the project.
Year(s) Of Engagement Activity 2020
 
Description Advisory Group 
Form Of Engagement Activity A formal working group, expert panel or dialogue
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Professional Practitioners
Results and Impact 9 policy makers, practitioners, researchers, and third sector workers convened to provide thoughts on our programme of work, offer ideas for broader dissemination activities and provide professional insights to assist the interpretation of hypothesised findings. Outcomes included excellent feedback from the advisory panel on our project and programme of work and requests for continued participation in future advisory groups.
Year(s) Of Engagement Activity 2017
 
Description Advisory Group Sept 2021 
Form Of Engagement Activity A formal working group, expert panel or dialogue
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Third sector organisations
Results and Impact This advisory group was convened to discuss advanced project findings with our major stakeholders and academics, and to invite them to provide feedback on the interpretation and implications of our work There were 12 people in total, and the feedback and insight provided was hugely valuable, particularly in discussing the manner in which our findings related to the experiences 'on the ground', in relation to both the take up of pay flexibility by schools, and the consequences of this.
Year(s) Of Engagement Activity 2021
 
Description Invitation to present work at School Teachers Review Body Strategy Day 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Policymakers/politicians
Results and Impact Our team was invited to present the initial findings from our project to the STRB, an independent advisory body that makes recommendations to Government on the pay and conditions of teachers in England. Our work was put forward by Ken Clark, who is part of our advisory group and the STRB's economist member, and the STRB found the work to be very relevant. We remain in contact with the STRB and they will be represented at future advisory groups and the end of project workshop.
Year(s) Of Engagement Activity 2019
 
Description Poster presentation at EALE conference Sept 2021 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Policymakers/politicians
Results and Impact We had the opportunity to fofer a poster presentation at the online EALE conference for European labour economists. Approx 40 attendees passed through over a 30 minute window into an online room where we presented a poster detailing our project research questions, background, methods and results. It was a very useful way to engage with participants as they were free to ask questions relating to any aspect of the poster and our project. Much of the discussion related to comparing the effects of pay decentralisation across different settings in Europe.
Year(s) Of Engagement Activity 2021
 
Description Presentation at COMPIE conference - June 2021 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Professional Practitioners
Results and Impact The COMPIE conference focuses on counterfactual methods for policy impact evaluation. There were 30 attendees to the presentation, and given the nature of the conference there was much debate and discussion around our methods, and approach to identifying schools that adopted pay flexibility. It was hugely useful for us, to ensure that we modelled school adoption of flexibility as accurately as possible.
Year(s) Of Engagement Activity 2021
 
Description Presentation at Institute of Labor Economics. 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Professional Practitioners
Results and Impact Excellent feedback from top economists in the field of labour economics, particularly considering how to interpret our findings and which further outcomes to consider. Approximately 40 academics attended, from Germany and internationally.
Year(s) Of Engagement Activity 2019
 
Description Presentation at NBER conference April 2021 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Professional Practitioners
Results and Impact We were invited to contribute a presentation of our work to the NBER Education Conference, curated by Prof Caroline Hoxby. We were honoured to present at such a prestigious event. Our talk generated much interest and discussion, particularly in relation to the types of schools which adopted pay flexibility and implications for the teacher labour market.
Year(s) Of Engagement Activity 2021
 
Description Presentation at University of Newcastle Business School 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach National
Primary Audience Professional Practitioners
Results and Impact A presentation at the University of Newcastle Business School, with the purpose of disseminating initial findings of the project nationally and obtaining feedback on the framing of the paper, which was important in the drafting of the discussion paper.
Year(s) Of Engagement Activity 2019
 
Description Presentation of paper at the Department of Social Science Seminar Series 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach Local
Primary Audience Professional Practitioners
Results and Impact A presentation of our discussion paper to the DoSS seminar series. The feedback from the audience was very useful, particularly in thinking about how to interpret our findings, and some aspects of the methodological challenges. The seminar was attended by approximately 30 academics, from different departments within UCL.
Year(s) Of Engagement Activity 2019
 
Description Presentation of paper at the Hungarian Academy of Sciences 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Professional Practitioners
Results and Impact The intended purpose was to obtain feedback from economists on the methods employed in this project. The feedback was useful, particularly in helping to formulate our approach to identifying schools which adopted the pay reforms.
Year(s) Of Engagement Activity 2019
 
Description Project website 
Form Of Engagement Activity Engagement focused website, blog or social media channel
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Public/other audiences
Results and Impact We have kept an ongoing online presence via our project website which has been hosted within the UCL IOE faculty website. The faculty website receives approximately 15,000 unique users per week making this a better way of attracting visitors than a standalone site, especially as it allows promotion of news items and events from the project on faculty- or university-wide pages, which we have been continually updating.
Year(s) Of Engagement Activity 2019
URL https://www.ucl.ac.uk/ioe/departments-and-centres/centres/quantitative-social-science/effects-teache...
 
Description Royal Economic Society (RES) 2020 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Professional Practitioners
Results and Impact This event was cancelled due to COVID.
Year(s) Of Engagement Activity 2020
 
Description Society for Research on Educational Effectiveness (SREE) - 2020 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach International
Primary Audience Professional Practitioners
Results and Impact This conference was cancelled due to COVID.
Year(s) Of Engagement Activity 2020
 
Description Work in progress seminar at the Centre for Economic Performance 
Form Of Engagement Activity A talk or presentation
Part Of Official Scheme? No
Geographic Reach Regional
Primary Audience Other audiences
Results and Impact We presented work at the CEP work in progress seminar which was extremely useful in helping us frame our paper and providing us with advice on a number of methodological challenges. There were approximately 35 academics in attendance, mostly from the LSE.
Year(s) Of Engagement Activity 2019