Worth every penny - and a few more

Better pay equals better teachers - and can lead to improvements in pupil performance, research suggests

The age-old rule of thumb is that you get what you pay for, the argument being that if you pay someone badly you get a bad performance. On the other hand, pay someone well - make them feel valued and rewarded - and performance will improve. Now, new research has confirmed that better pay for teachers will attract higher-quality graduates into the profession.

Last month, albeit in a different setting, the issue of teachers' pay attracted an unlikely sympathetic voice. The head of education at Policy Exchange - described as prime minister David Cameron's favourite think-tank - said he understood why swathes of teachers were angry about the changes being introduced to their pension schemes. "Teachers in the public sector are not on massive salaries," James Groves told TES. "They work hard and I can understand them being irked."

Gripes about salaries and how much people are paid - and, more specifically, whether they are paid enough - are as old as the hills. But what if teachers were better paid and higher up the national income-distribution table? Would there be an improvement in pupil performance?

Research by two academics, Professor Peter Dolton at London University and Dr Oscar Marcenaro-Gutierrez from Malaga University, says there would. The pair looked at the salaries of teachers across the Organisation for Economic Co-operation and Development (OECD) countries - membership of which is mainly confined to developed countries such as the UK and US - over the past 15 years. Their aim was to "examine the relationship between the real and relative levels of teacher remuneration and the measured performance of secondary school pupils".

According to the research, which has been published by the Centre for Economic Performance, part of the London School of Economics, there are two potential explanations for why teachers' pay may be linked to pupil outcomes.

The first is that higher pay attracts more able graduates into the profession and that, once recruited, higher relative pay or performance- related pay could provide teachers with stronger incentives to improve pupil performance.

The second is that improving teachers' pay improves their standing in a country's pay table and so increases the national status of teaching as a profession."As a result of this higher status," the researchers' argument runs, "more young people will want to become teachers. This in turn makes teaching a more selective profession and hence facilitates the recruitment of more able individuals."

Looking at data going back to 1995, Professor Dolton and Dr Marcenaro-Gutierrez discovered that better pay does have an impact on the performance of pupils. "(There is) a clear statistical association between higher relative teachers' pay and higher standardised pupil scores across countries," the report says. "Our research supports the hypothesis that higher pay leads to improved pupil performance. As an indication of the relative size of this effect, we find that a 10 per cent increase in teachers' pay would give rise to a 5-10 per cent increase in pupil performance. Likewise, a 5 per cent increase in the relative position of teachers in the income distribution would increase pupil performance by around 5-10 per cent."

It is, perhaps, a report that teaching unions should brandish in their next meeting with government officials to discuss pay and conditions, because the implications are obvious.

"If a government is concerned with educational outcomes, then it should be aware the quality of its teachers is of fundamental importance," it continues. "We suggest the route to hiring teachers from higher up the ability distribution is to pay them at a higher point in the country's income distribution."

The research stops short of suggesting that better paid teachers will automatically improve pupil performance; highly paid chief executives, footballers and financiers, just like relatively poorly paid teachers, can also drop clangers.

So, higher salaries will not inevitably see schools churning out more and more A* pupils. But what the report does say is this: "If a country is not prepared to pay teachers relatively well, then it will have to go a long way down the road of reducing class sizes to compensate them - in short, governments and educational administrators need to know that there is 'no free lunch' here."

Like all economists, the researchers point out the copper-bottomed logic of their arguments. "Increasing teacher salaries (and the speed at which they can reach higher pay levels within a particular pay structure) will help schools to recruit and retain the higher-ability teachers that schools need to offer all pupils a high-quality education."

And like all economists, they give a fiscal justification for why governments should look at stumping up the extra cash. "Improvements in education," the report concludes, "appear to be a common factor behind economic growth in recent decades in all OECD countries."


Dolton, P. and Marcenaro-Gutierrez, O. "If You Pay Peanuts, Do You Get Monkeys? A cross-country analysis of teacher pay and pupil performance", Economic Policy, January 2011.



Rather than governments dumping existing teachers and starting again, the research says raising the quality of existing teachers should be done gradually.

One way is for governments to ratchet up starting pay for new teachers. But ways to improve the existing stock include continuing professional development, training and getting rid of - firing - the worst teachers.

A possible way to improve teaching through better wage packets, the research adds, is to look at paying teachers in accordance with how their pupils perform. Another solution would be to look at increasing the rate at which teachers' pay rises with their level of experience.

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