Raising the Floor: Teacher Retention Effects of a Statewide Minimum Salary Increase

• In Event: Re-engaging at Scale: How State and Institutional Policies Impact Re-enrollment and Success for Adult Learners

Abstract

Attracting and retaining high-quality teachers in the profession is a matter of significant policy concern. In this respect, increasing teacher salaries and creating more attractive compensation packages are often proposed to achieve this goal. To date, lawmakers in at least 23 states have proposed bills that increase minimum teacher salaries and offer other bonuses to improve teacher recruitment and retention, particularly in shortage areas. Six of these bills have been signed into law, including the Arkansas LEARNS Act. Signed in March 2023, the LEARNS Act increased the state’s minimum teacher salary from $36,000 to $50,000, guaranteed all teachers a minimum raise of $2,000, and removed requirements that salary schedules offer incremental pay based on experience and education. While the state is providing the necessary funds to meet these requirements, districts have the flexibility to adjust their salary schedules to reward educators based on experience and education or implement more creative approaches to teacher compensation.

Attracting and retaining a high-quality teacher workforce is a central challenge for education policy, and higher teacher salaries are often proposed as a solution. The LEARNS Act increased Arkansas's minimum teacher salary from $36,000 to $50,000, guaranteed all teachers a minimum raise of $2,000, and provided school districts with the flexibility to deviate from traditional, seniority-based salary schedules. We collected districts' teacher salary schedules one year before and after implementation and integrated these data with administrative records to study.

We collected information about Arkansas districts’ teacher compensation policies one year before the implementation of the LEARNS Act (2022-23) and during the first year of implementation (2023-24). We merged this information with other district characteristics from the Arkansas Department of Education data and the NCES’ Common Core of Data. Finally, we integrated this district-level data with teachers’ administrative records to study districts’ adjustment to the law and teacher retention during the first three years of the reform.

In particular, our paper addresses the following questions:  
(1) How have school districts' teacher compensation policies changed in response to the LEARNS Act?
(2) How has the distribution of teacher salaries across districts and regions changed, and how have the relationships between teacher salaries and district characteristics shifted? 
(3) How have the LEARNS Act salary increases affected teacher retention?

We find that districts largely implemented the minimum adjustments required to meet the new statutory floor. These changes substantially increased the competitiveness of starting salaries in traditionally lower-paying, higher-poverty, and rural districts, weakening the previously negative relationship between starting pay and district poverty and rurality. Using a triple-difference-in-differences research design that exploits variation in the size of LEARNS Act salary increases, we find that teachers who received raises exceeding the $2,000 minimum were more likely to remain in their districts in subsequent years, with the strongest retention effects among those receiving the largest increases. We also provide evidence that these retention effects may fade over time as inflation erodes the real value of the initial salary gains.

Author

• Gema Zamarro, University of Arkansas
  Presenting Author