Secondary school teacher pay and pupil performance in the Netherlands

This thesis investigates whether teachers’ pay affects pupil performance. It focuses on Dutch general secondary education. It covers all VWO and HAVO schools for the time-period of 2010-2014. On the one hand, secondary school teacher pay is essentially fixed across the Netherlands; on the other hand, average regional wages vary across the country, resulting in variation in relative teacher wages. I exploit this exogenous variation to reveal the causal impact of teacher pay on pupil performance. I regress pupil performance on average regional wages by controlling for pupil-teacher ratio, school fixed effects, year fixed effects, and other variables. Overall, my research shows that secondary education teacher pay does not affect pupil performance. However, there is a strong statistical and economic relationship for technical VWO tracks. A 10% increase in outside wage leads to a 2.7% drop in the average state exam GPA for technical VWO tracks. The impact is most poignant specifically for the Nature and Technology VWO track, where a 10% increase in outside wage leads to a 4.8% decrease in the average state exam GPA and to a 12.4 percentage point decrease in pass rate.