Teachers’ Base Salary and Districts’ Academic Performance: Evidence From National Data

Abstract

This paper examines the relationship between teacher pay and students’ academic achievement, using nationally representative, district-level linked data between districts’ performance on standardized tests and average teacher base salary. By employing state fixed effects and multilevel mixed effects models, we find that both mathematics and English test scores are significantly higher in districts that offer higher base salaries to teachers, compared with those in districts with a lower teacher base salary. We also find that higher teacher base salaries reduce achievement gap between white and black students, as well as between white and Hispanic students, by raising test scores more for those minority students.