The influence of increased teacher pay on student performance: a case study of Randstad & non-Randstad schools in 2004-2015

In this paper the effect of teacher pay on student performance has been examined. This has been done through a difference-in-difference design, in which Randstad schools received an extra amount of teacher pay in comparison to non-Randstad schools. Schools that are just in and outside the Randstad are compared to each other, with the assumption that these schools are similar to each other. The remuneration policy came into action in 2008, but the first effects on student performance were not expected until 2010 and later, so studied years of impact are 2010, 2011 and 2012. Two different variables are used as outcome variable, the average central examination grade and a school grade, which is a measure developed by Jaap Dronkers that reviews each school each year. The analysis indicated mixed results; in some cases the extra teacher pay for Randstad schools increased their student performance, in other cases the extra teacher pay decreased the student performance. Nevertheless, an interesting pattern could be established; the estimations for lower education levels all have a negative sign, while the estimations for higher education levels mostly have a positive sign. This suggests a positive relationship between education level and effectiveness of teacher pay on student performance.