Differentiated Compensation: How California School Districts Use Economic Incentives to Target Teachers

Many districts and schools have trouble recruiting and retaining teachers who have the necessary credentials and skills to meet the needs of their students. This trend is particularly severe in low-income, "high-needs" schools and districts. As such, districts and schools are implementing policies that are intended to reform compensation in order to increase teacher recruitment and retention. Although much of the recent discussion surrounding teacher compensation has centered around districts' use of merit pay, many districts are already using differentiated compensation incentives to target specific kinds of teachers in an attempt to attract and retain not only the highest quality teachers, but also the teachers districts most need to teach in their specific local contexts. Using a self-collected dataset of California school districts from the 2005-2006 and 2008-2009 school years, the frequency with which districts in California use targeted economic incentives and the kinds of districts that are most likely to implement such policies are examined. While many school districts in California have economic incentive policies targeted at teachers with specific skills or credentials, most incentive policies are focused on teachers with rough proxies for "quality." Those that do target teachers in high-need subjects, for the most part, focus on rewarding those certified to teach special education students and English language learners (ELLs)—few are aimed at teachers of other hard-to-staff subjects such as math or science. In addition, there is limited evidence that particularly "hard-to-staff" districts—such as those with high proportions of minority and poor students and those with low academic achievement—are more likely to implement economic incentives that target teachers with specific subject credentials and are less likely to focus their efforts on attracting and retaining "high-quality" teachers.