Teacher Bonuses and Teacher Retention in Low-Performing Schools

Abstract

Between 2001 and 2004, the state of North Carolina gave an annual salary bonus of $1,800 to certified math, science, and special education teachers in a set of low-performing and/or high-poverty secondary schools. Eligible teachers were to continue receiving the bonus as long as they continued in the school. In a survey of teachers and principals, the authors find evidence that school personnel favor the use of monetary incentives to increase the attractiveness of their workplace but were skeptical that the amount of the bonus would be sufficient to reduce the high turnover rates in their schools. Preliminary evidence on turnover rates supports this skepticism. Given that the survey evidence reveals widespread misunderstanding of the retention incentives incorporated into the program, the authors conclude that the bonus program was hampered by a series of flaws in design and implementation.