The Effects and Local Implementation of School Finance Reforms on Teacher Salary, Hiring and Turnover

The Effects and Local Implementation of School Finance Reforms on Teacher Salary, Hiring and Turnover

This paper assesses the extent to which policy-induced salary schedule changes affect teacher recruitment and retention. We examine a legislative funding formula change in Washington state—induced by the McCleary court-ordered finance reform of 2012—that allocated more state-level funding for certificated, administrative, and classified staff salaries beginning in the 2018-19 academic year. Using a simulated instrument strategy embedded in an explanatory sequential mixed methods design, we observed that local collective bargaining directed new state-level funding to increase teacher salaries, particularly for senior teachers. Variation in political power, priorities, and interests of both districts and unions led to greater heterogeneity in teacher salary schedules among districts. The rate of new recruitment decreased in year two of the reform, and the rates of teachers’ transfer between districts decreased in the first and second years of the reform. Suggestive evidence indicates that a $1,000 salary increase would have larger effects on early-career and junior teachers’ hiring and reduce early and mid-career teachers’ transfers between districts to a greater extent than late-career teachers. These findings can inform policymakers to strategically allocate salary resources to achieve their teacher workforce development goals.