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Preferences, Selection, and the Structure of Teacher Pay

Andrew C. Johnston

American Economic Journal: Applied Economics2025https://doi.org/10.1257/app.20210763article
AJG 4ABDC A*
Weight
0.41

Abstract

I examine teacher preferences using a discrete-choice experiment linked to data on teacher effectiveness. I estimate willingness to pay for a rich set of compensation elements and working conditions. Highly effective teachers usually have the same preferences as their peers, but they have stronger preferences for performance pay. I use the preference estimates to investigate the optimal compensation structure for three key objectives: maximizing teacher utility, maximizing teacher retention, and maximizing student achievement. Under each objective, schools underutilize salary and performance pay while overutilizing retirement benefits. Restructuring compensation can significantly improve both teacher welfare and student achievement. (JEL H75, I21, J31, J32, J45, J81)

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https://doi.org/https://doi.org/10.1257/app.20210763

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@article{andrew2025,
  title        = {{Preferences, Selection, and the Structure of Teacher Pay}},
  author       = {Andrew C. Johnston},
  journal      = {American Economic Journal: Applied Economics},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.1257/app.20210763},
}

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Preferences, Selection, and the Structure of Teacher Pay

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Evidence weight

0.41

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.25 × 0.4 = 0.10
M · momentum0.55 × 0.15 = 0.08
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.