Teacher labor markets in developing countries

Can the US learn from the experience of developing countries’ efforts to staff under-funded schools with quality teachers? This article summarises research into strategies used by developing countries to improve teaching and thereby improve student outcomes in schools serving poor populations. Drawing on experiences from Latin America, Central and South Asia and Africa, it investigates how well different incentives such as wages, subsidies and merit-based pay and supplementary allowances, as well as management reforms, improve teacher effectiveness.

The review finds that teaching quality and student achievement are sensitive to both the level and structure of teacher compensation. However, teachers do not always respond to incentives in predictable ways. To be effective, the design of teacher incentives is critical: incentive schemes must be tightly coupled with the desired teacher behaviours, and generous enough to give teachers a reason to make the extra effort.

Importantly, however, the research also suggests that reforms that are not specifically designed to affect teachers can also influence the characteristics of those who choose to enter and remain in teaching, as well as their work in classrooms. In particular, school-based management reforms that devolve decision-making authority to the schools, for example, have had important effects on teacher performance and student learning by making teachers (and schools) more accountable to their communities. Devolution of decision-making authority to schools in Central America has, in many cases, led to lower teacher absenteeism, more teacher work hours, more homework assignments, and better parent-teacher relationships. In some cases, these reforms can have a greater effect on student outcomes than increased rewards for teachers.