Do Higher Salaries Yield Better Teachers and Better Student Outcomes?

Abstract

We study the effects of a policy aimed at attracting experienced teachers in primary schools in disadvantaged neighborhoods in Uruguay. Teachers in these schools could earn higher salaries. Program eligibility was based on a poverty index with a cutoff rule. Estimates from regression discontinuity models show that the policy increased teacher experience. Overall, the effect on student outcomes was small. The program may have increased experience in ways that are not strongly associated with improved student outcomes. Consistent with this, we do find achievement gains for students in schools that saw a reduction in the share of very inexperienced teachers.