Like Ezra Klein, I am unsurprised that the much-touted idea of “merit pay” turns out not to work that well, according to the latest study from Vanderbilt (here).
I’m also with Klein on the general point of overall teacher salaries, as opposed to specific teacher salaries. (It would stand to reason that more talented people would go into education, if salaries averaged those of investment bankers.) At the same time, though, I want to hazard us against believing that economic incentives are magical and that Klein’s broader incentive structures may not be as attractive as they appear.
Take investment banking — an analogy that Klein uses. Investment bankers receive performance bonuses, which are directly tied to performance. And yet, I don’t think anyone would call investment banks “well-run” in the wake of the financial crisis. I would further hazard that few would say that compensation at investment banks are well-designed for optimal outcomes (see: Lehman Brothers).
Furthermore, overall salaries in i-banking are quite high and attractive, despite the fact that i-banking requires enormous time investment and sucks your soul away. Does this give us an optimally functioning system? Not at all! In fact, I would guess that the exorbitant period for i-bankers (1980s-present) was no more productive for the stability of banks or society than the period preceding it.
This is not to say that merit pay is bad, per se, simply that it does not solve many of the problems in education. In fact, even increasing overall pay (ex: Illinois — $58k average teacher salary — ranked #1 in salary comfort index — ranked #37 in ACT score) will not necessarily produce better results, attract better talent, or train better teachers.