Salary Schedules, Teacher Sorting, and Teacher Quality

44 Pages Posted: 25 May 2011

See all articles by Gregory Gilpin

Gregory Gilpin

Montana State University - Bozeman

Multiple version iconThere are 2 versions of this paper

Date Written: May 5, 2011


This study investigates how salary rigidities affect teacher quality across teaching subjects and high schools and whether high quality teachers can be compensated sufficiently to attract them into unfavorable schools. For identification, we rely on idiosyncratic variations in compensation across adjacent districts within the same state. The results indicate that, on average, math/science teachers’ scholastic aptitudes are 8.5 percentiles lower and humanities teachers are 4.5 percentiles lower compared to other teachers. Furthermore, we find that schools with higher percentages of student eligible for free lunch hire teachers with, on average, 7 to 17 percentiles lower scholastic aptitudes with the math/science teachers being even lower. Increases in lifetime compensation is found to raise the scholastic aptitude of teachers hired across all schools, with diminishing returns in schools with more favorable working conditions. However, the lower 26% of the teacher aptitude distribution seems to not respond to compensation at all with only marginal gains up to the 60th percentile. Furthermore, bonus/merit pay or additional school activity income do not seem to be significant in recruiting/retaining high aptitude teachers.

Keywords: Salary Schedules, Incentive-based Pay, Math and Science Teachers, Wage Gradient, Teacher Sorting, Teacher Quality

JEL Classification: I22, J31, H72

Suggested Citation

Gilpin, Gregory, Salary Schedules, Teacher Sorting, and Teacher Quality (May 5, 2011). Available at SSRN: or

Gregory Gilpin (Contact Author)

Montana State University - Bozeman ( email )

Bozeman, MT 59717-2920
United States
406 551 4887 (Phone)


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