Are Pay Incentives the Solution to Teacher Shortages?

January 04, 2021 • Tracy Morris

Are Pay Incentives the Solution to Teacher Shortages?

As teacher shortages continue to plague the country, a new investigation seeks to find if providing bonuses or loan forgiveness to teachers in positions that are hard to staff can help.  

The Impact of Incentives to Recruit and Retain Teachers in “Hard-to-Staff” Subjects, a study published in the Journal of Policy Analysis and Management, focused on an initiative in Florida, which began a student loan forgiveness and bonus program 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 school year.

Reducing attrition

To determine the effectiveness of the program, researchers used data from 1995 through 2013 to examine retention among teachers who were eligible for bonuses or loan forgiveness and compared it to those who were ineligible. In short, both programs made a difference, but bonuses seemed to have more of an impact.

Results indicate that the loan forgiveness reduced mean attrition rates for middle and high school math and science teachers by 10.4 percent and 8.9 percent, respectively. The success of loan forgiveness payments varied based on the amount given to eligible teachers.

When at least $2,500, the program reduced attrition of special education teachers by 12.3 percent, but when the benefit was reduced the program did not have a statistically significant impact on attrition. Finally, the research found that a one‐time bonus of $1,200 had the most success, reducing the likelihood of a teacher’s resignation by as much as 32 percent.

Incentives and teacher quality

The research found that the loan forgiveness recipients in middle and high school math and special education were as effective or better than teachers not participating in the program. Other ways the program may have been successful are less tangible, though not hard to identify:

  • Teachers improve with experience.
  • Recruiting and hiring new teachers is expensive.

Impact on applicants

While research has shown that pay is not the most important factor to potential applicants, these findings provide evidence that money can incentivize teachers to stay in the classroom, even at moderate amounts. Districts that struggle to attract applicants because of pay but believe they can offer non-monetary incentives like small class sizes, administrative support, and a positive culture could benefit from offering modest incentives to teachers in hard to staff roles.


Tracy Morris is an HR & compensation consultant at TASB HR Services. Send Tracy an email at tracy.morris@tasb.org.


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Tagged: Compensation, Recruiting, Retention