The impact of financial incentives on teacher supply

New research by the National Foundation for Educational Research (NFER) and commissioned by the Gatsby foundation reveals Department for Education’s (DfE) proposals on teacher pay, combined with other financial incentives such as the ‘levelling up premium’, are unlikely to result in an adequate supply of teachers in England in 2022-2025, particularly in the sciences and maths.

The study suggests the Initial Teacher Training (ITT) recruitment target for maths is likely to be met over the next four years – but is unlikely to be met in physics, chemistry, computing and across all three science subjects combined.

According to the research the attractiveness of teacher pay matters for ITT recruitment. The study estimates that a one per cent increase in the teaching starting salary – over and above the change in the outside-teaching graduate starting salary – is associated with a two per cent increase in applicants to ITT. This suggests an increase in pay could make a real impact in recruiting teachers, as well as retaining them.

The study also suggests the Government should introduce additional financial incentives to improve teacher supply, including increasing bursaries and applying the ‘levelling up premium’ early-career retention payment to all teachers of shortage subjects in England. It recommends that for some subjects, combinations of additional financial measures could support the improvement of teacher supply.

But the research also highlights that physics and computing are highly unlikely to meet their recruitment targets under any package of measures. To tackle this the education system could consider additional measures, including, for example: subject specialism training in physics for trainees and teachers in the classroom; ensuring physics teachers are deployed to teach physics rather than other subjects, and addressing the relatively low numbers of students studying physics at A- Level and as an undergraduate degree.

Co-author of the report and NFER School Workforce Lead Jack Worth said:

“With average pay in the UK set to rise by 5.3 per cent this year, increasing teachers’ pay by an average of 3.9 per cent is only likely to exacerbate the teacher supply challenges that were prevalent before the pandemic and have rapidly re-emerged. DfE’s proposal to target higher pay increases at early-career teachers is sensible, but our analysis shows the overall financial package is still very likely to leave the sector short of the new teachers it needs.

“Particularly for shortage subjects such as physics, chemistry and computing, more action to improve teacher supply is needed, whether that is financial or non-financial. Failing to take action will lead to increasing under-supply of teachers, which is likely to have a negative impact on the quality of STEM education in England.”

Jenni French, Head of Teacher Supply Programmes at the Gatsby Foundation said:

“This important work is yet more evidence of the impact that financial incentives can have on teacher supply. This and other Gatsby supported research has demonstrated various ways in which government could use salary, bursary, and retention payments to increase the number of pupils who are taught by specialist teachers. I hope that the thoughtful recommendations set out in today’s report are given serious consideration.”

Key findings from the report include:

• The strength of the wider labour market matters for teacher recruitment, with the research showing that a decrease of one percentage point in the UK unemployment rate (i.e. a stronger labour market) is estimated to be associated with a six per cent decrease in applicants to ITT.
• There is strong and consistent evidence that training bursaries are associated with increases in ITT recruitment, with previous studies consistently estimating that a 2.9 per cent increase in ITT applications is associated with each additional £1,000 of bursary.

Recommendations from the report include:

• The School Teachers’ Review Body (STRB) should consider recommending that teacher pay should increase by more than 3.9 per cent overall in 2022/23, to maintain teacher pay competitiveness and support teacher supply.
• The DfE should consider increasing bursaries in shortage subjects up to a maximum of £30,000 and expanding the ‘levelling up premium’ to apply to teachers working in schools across England, to further improve recruitment and early-career teacher retention.
• As part of its future evidence to STRB, the DfE should publish full impact assessments of its pay and financial incentive proposals on overall teacher supply. Where an impact assessment suggests supply is unlikely to be met, the DfE should set out the financial and non-financial actions being taken to improve teacher supply, particularly in subjects not expected to reach their respective targets.

Read the full report here.