Show Who the Money? Teacher Sorting Patterns and Performance Pay across U.S. School Districts

Pay for performance (PFP) remains one of the most controversial policy debates in the New Public Management reform era. Skepticism about PFP in the public sector is often grounded in theories of public service motivation that suggest a misalignment between PFP's focus on extrinsic market-based pay incentives and intrinsically motivated government workers. Frequently missing from this analysis, however, is any consideration for whether PFP leads to positive "sorting" effects on the composition of a government agency's workforce through attraction, selection, and attrition processes. Using data from two waves of the Schools and Staffing Survey, the authors examine whether PFP influences the sorting patterns of K–12 public schoolteachers across U.S. school districts. Findings show that, on average, school districts that adopted PFP secured new teacher hires who had graduated from colleges and universities with average SAT scores that were about 30 points higher than the new teacher cohorts hired by districts that did not adopt PFP.