The effect of financial incentives on the retention of shortage-subject teachers: evidence from England

School systems often experience shortages of maths and science teachers, reflecting difficulties in both recruiting and retaining people qualified to teach these subjects. In England, teachers with maths and science degrees face a higher outside pay ratio than other teachers and also tend to leave the profession at higher rates. We evaluate a policy aimed at improving retention by providing targeted uplifts in pay worth 8% of gross salary for early-career maths and physics teachers. Leveraging variation in eligibility across time, regions and school subjects, we find that eligible teachers are 23% less likely to leave teaching in state funded schools in years they were eligible for payments. This implies a pay-elasticity-of-exit of -3, which is similar to results from evaluations of similar policies in the United States. Our analysis suggests that the cost per additional teacher retained through the policy is 32% lower than training an equivalent replacement teacher. Taken together, these results suggest that persistent shortages of maths and science teachers can be reduced through targeted pay supplement policies.