Empirical evidence on the effects of compensation reform is somewhat scarce. Most U.S. public school teachers are paid according to rigid schedules that determine pay based solely on seniority and academic credentials. In unionized school districts, these schedules are set by collective bargaining agreements. In 2011 when the Wisconsin state…

Compensation of most US public school teachers is rigid and solely based on seniority. This paper studies the labor market effects of a reform that gave school districts in Wisconsin full autonomy to redesign teacher pay schemes. Following the reform, some districts switched to flexible compensation and started paying high-quality teachers more.…

Teachers are one of the most important inputs in the production of student achievement, and their impact persists throughout adulthood. Attracting and retaining high-quality teachers to the profession is thus a policy issue of highest importance. More attractive compensation packages are often proposed as a possible tool to achieve this goal. In…