08 May Top economics journal publishes paper co-authored by AIGHD staff
A paper investigating the impact of increasing teachers’ salaries on education quality has been published in the top ranked journal of economics.
Authored by Joppe de Ree, Karthik Muralidharan, AIGHD senior academic staff Menno Pradhan and Halsey Rogers, the article ‘Double for Nothing? Experimental Evidence on an Unconditional Teacher Salary Increase in Indonesia’ appeared in The Quarterly Journal of Economics this month.
The question around increasing teachers’ salaries to improve education is also being fiercely debated in the Netherlands. Two arguments are often presented: the first is that higher salaries make the teaching profession more attractive, which will attract brighter people into the workforce. The second is that higher salaries will motivate existing teachers, who will then put more effort into their jobs.
This paper empirically tests the latter argument using the Indonesian teacher certification program: when a teacher passes the program, their salary is doubled. Because the program was expensive, it was slowly phased in. The researchers worked closely with the Indonesian Ministry of Education to evaluate the policy. To this end, in a random (treatment) sample of 120 schools the program was implemented immediately. Teachers in the treatment group could immediately enter the certification program and teachers in the control school had to wait until it was their turn. The authors tested for impact one-and-a-half years and two-and-a-half years after the start of the experiment.
Relative to control schools, teachers in treatment schools reduced their work hours in second jobs and were more satisfied with their income. However, there is no evidence suggesting they increased effort for their main teaching job and student test scores were not affected. This indicates the second argument, that education will improve because higher salaries will motivate teachers, did not hold in Indonesia.
The paper provides no evidence for whether education will improve because better people will be attracted to the teacher profession. But if it does, it will probably not be cost effective, as there is very little turnover of civil servant teachers in Indonesia and for the coming decades, and most children will be taught by existing teachers.