Study: Market-Based Incentives for Teachers Key to Student Achievement

Primer assesses impact of teacher quality on student performance and examines strategies for improvement, including merit pay

News Release
Tuesday, Aug. 19, 2008

Michael D. Jahr
Director of Communications

MIDLAND — The Mackinac Center for Public Policy today released "A Teacher Quality Primer for Michigan School Officials, State Policymakers, Media and Residents," the fourth volume in the Center’s Michigan School Management Series for public schools. In the 147-page book, Marc J. Holley, a Mackinac Center adjunct scholar and an education policy analyst at the University of Arkansas Department of Education Reform, finds that teachers are the most important local factor in education, but argues that paying them for graduate degrees and years of experience does not improve student achievement, while offering incentives such as merit pay would.

"Teachers are key to student learning," said Holley. "Faced with rising expenditures and agnant or falling test scores, education policymakers can no longer afford to ignore the reality that teachers respond to incentives. Policies that protect low-performing teachers at the expense of student achievement — and other teachers — need to be replaced. Michigan’s children deserve no less."

Noting that Michigan’s public education spending has increased considerably since 1988 while student achievement has been lackluster compared to the rest of the nation, Holley explores whether more classroom experience, better academic skills and stricter certification make teachers more effective in the classroom. Drawing upon extensive research on the connection between teachers and student achievement, Holley concludes that market-based reforms, such as merit pay and differential pay, are the most promising for promoting student achievement.

"A Teacher Quality Primer" is on the Web at

Further resources on teacher quality in Michigan can be found at