The determinants of school district salary incentives: An empirical analysis of, where and why

Most public school districts in the United States use a salary schedule to determine compensation for teachers within the district. However, some school districts have implemented incentive pay schemes that allow flexibility at the school or even individual teacher level. These compensation schemes in some ways may more closely approximate a competitive labor market. This study examines the factors that influence a district's decision to offer incentive pay using districts from the 1999 to 2000 Schools and Staffing Survey. The results suggest that school districts that face barriers to recruitment or retention and districts that face competition from non-sectarian private schools are more likely to offer incentive pay.