Where did the subsidy go? The effect of extra funding for schools with disadvantaged students on teacher retention and hiring rates

This study examines the eect of extra funding for schools with disadvantaged minority students on teacher turnover and teachers' experience. In this study we aim to nd out whether a personnel subsidy targeted at elementary schools with large proportions of disadvantaged minority pupils aected teacher retention and hiring rates, and as a result average teacher experience. The subsidy we evaluate gives elementary schools with at least 70 percent disadvantaged minority pupils extra funding for personnel. This 70 percent cuto provides a regression discontinuity design that we exploit in a local dierence-in-dierences framework. The (temporary) personnel subsidy did not have the desired impact on several aspects of teacher mobility. The point estimates of the eect on retention rates are not signicantly dierent from zero. We do nd a signicant eect on hiring rates in the rst 8 months after the announcement. In subsequent years the point estimates are insignicant. Our results with respect to the eects on experience show that, except for experience in education in 2001, all point estimates have a negative sign. For the year 2004 it is even statistically signicant at the 10% signicance level. We conclude that the (temporary) extra funding does not have a positive impact on the average teacher experience/quality. Finally, we also checked whether the extra resources are allocated to higher salaries and whether more teachers are hired in terms of full-time jobs (FTEs). We did not nd any signicant eects on teacher remuneration nor on the total number of full-time teacher jobs that a school employs.