Teacher Sorting and Preferences over School Disadvantage: Evidence from Performance Pay in Texas

• In Event: Salaries, Sorting, and Discrimination: Educator Compensation and Workforce Dynamics

Abstract

The uneven distribution of effective teachers across schools remains a central challenge in U.S. education policy. Students in low-income and rural schools consistently have less access to high-quality educators, and rigid salary schedules limit the ability of disadvantaged schools to compete for talent. Policymakers have increasingly turned to financial incentives to address this imbalance, yet existing evidence draws primarily from small-scale, short-lived, or district-level programs whose findings are difficult to generalize. This paper examines whether a large-scale, permanent, performance-based compensation program can reshape teacher sorting patterns.This paper evaluates the Texas Teacher Incentive Allotment (TIA), a statewide initiative established in 2019, which provides annual salary bonuses ranging from $3,000 to $32,000 to designated teachers; the size of the bonus awarded to each school increases as the percentage of disadvantaged students served by the school increases. I develop a theoretical model to describe how TIA will operate through two pathways: a compensating differentials pathway that will increase the relative wage paid to teachers employed by high-need schools, and a credentialing pathway that will create a portable quality indicator giving teachers greater flexibility to seek employment opportunities outside of their current schools. The net impact of TIA on geographic sorting is theoretically ambiguous.I use a restricted access Texas Education Agency administrative dataset provided by the University of Houston Education Research Center, covering all K-12 public school teachers in Texas from 2011-2024 along with program-specific information that identifies which teachers were identified as eligible for TIA, their designation level, and the amount of money allocated to each school for its designated teachers. Together, this combination of administrative data and program specific information allows me to examine the mobility of individual teachers and the locations of where they choose to relocate after being designated, using an event study difference-in-differences design comparing the mobility of designated teachers to a comparison group of similarly effective teachers who are designated for the last time observed in the data set.I find that designation increases overall mobility. However, the sorting patterns that emerge are potentially perverse from an equity standpoint. Designation increases the probability of moving to top-quartile SES schools but has no significant effect on movement to bottom-quartile SES schools. Teachers move to schools that are relatively lower-SES than their current placement, but this movement bypasses the highest-need campuses, suggesting that teachers target schools where incentive payouts are moderate rather than maximal. Geographic search does not expand meaningfully following designation. These findings indicate that TIA's financial incentives are sufficient to shift mobility at the margin but insufficient to overcome the non-monetary costs concentrated in the most disadvantaged schools, highlighting important limitations of incentive-driven redistribution strategies.

Author

• Patrick Massey, Michigan State University
  Presenting Author