Does Wage Regulation really harm kids?

A study from The Centre for Market and Public Organisation under the somewhat dramatic title “Wage Regulation Harms Kids” claims to show that pupils’ performance at GCSE is affected by how teachers’ pay compares with pay generally in the area. It suggests that where pay generally is high pupils do worse and vice versa. From this it concludes that there should be more variation in teacher pay and in particular that teachers in high wage areas should get more.

The first thing you notice when tackling this paper is the author’s appalling ignorance of how education works. For example they believe that “teacher wages are set by local authorities”. They also think there are still KS1 and KS3 tests! Their ingrained prejudices about schools can be seen from the suggestion that “better conditions in these schools (that is church and selective schools) make teachers less responsive to wages.”

The paper is purely an exercise in statistical correlations relating teacher pay, general pay levels and pupil achievement, both raw GCSE and an attempt at value added, though it would seem without using any of the established measures of performance and value added. Having found a correlation, the paper then speculates about causes. Its speculation however is entirely constrained by the initial hypothesis that wage levels cause differences in performance. It suggests ways in which that relationship might work but never asks whether there may be any other factors at work.

In particular the authors make no attempt to consider any other kinds of evidence. Their presumption is that the quality of teaching is worse in areas where teaching is paid lower that other jobs. There is no attempt to test this assumption, for example by analysing Ofsted’s grading of the quality of teaching. Nor have they made any attempt to investigate what teachers think about pay differentials and whether it makes a difference to where they work – and indeed to how hard they work.

Because the latter is what the author’s believe. In one of the most breath-taking comments they say “The nature of teaching is that a large proportion of the work is discretionary (lesson planning, after school programmes, time invested in individual children) so there is scope for reductions in effort in response to relative wages.” Not a shred of evidence is offered to prove this is actually happening – just an assumption from people who clearly can’t comprehend that anyone has any motivation except cash.

Much of the spin around the document – including its title – suggests that the impact is really serious. In fact, the effect they find is a difference of 1 GCSE point per pupil – not nothing, but not really living up to the overblown rhetoric.

The policy implication, of course would be a transfer of resources from poorer to more prosperous areas. The attempt to wriggle out of this unfortunate fact is a classic and needs to be quoted in full:

“Government policy to promote flexible wages for teachers would give more public resources to richer areas of the country. Any increase in public sector teacher wages in these areas is not necessarily a policy focused on the rich, since pockets of high deprivation exist within many of these areas. Further, richer parents in these areas are far more able than poorer ones to substitute away to better state schools further afield or into the private sector and thus avoid the negative consequences of centralized wage rates. There would also be a potential positive long run effect of improving public sector schools in high outside wage areas if the more wealthy were encouraged back into the public sector, which could positively impact the rest of the school through positive peer effects.”

There is no doubt that this paper will be seized on by Michael Gove as justification for his drive to break national pay bargaining. It will come in the category of “research shows….” so beloved of the DfE. So it is important to be clear that it proves nothing. Even if the statistical material is reliable – and given how the paper is riddled with basic errors and prejudices, this has to be doubtful – there is no evidence of cause and effect and absolutely no attempt to consider any other kind of evidence or any other potential causes.

The London example may perhaps set us thinking in a different direction.  Here, pay differentials between teaching and other professions are at their highest. Yet London has the fastest improving results and outperforms much of the rest of the country. Why? Because London has focussed rigorously on professional development and on supporting school improvement. If London can do this without closing the pay gap to the rest of the economy, is there any reason why it can’t happen elsewhere?


One Comment on “Does Wage Regulation really harm kids?”

  1. Gabriel Gidi says:

    The other side of the argument is that if it is true that low pay impacts teaching and in turn GCSE results then it is possible to argue that those areas where pay is going to be reduced will suffer similar effects. For three years government has frozen the salaries of teachers and other public servants but GCSE results have improved year on year until this year when it is alleged that grade boundaries were tampered with. This disproves the notion that teachers only produce results that are in line with their salary satisfaction.