Teacher turnover is a major challenge for schools globally, particularly affecting disadvantaged students in urban areas. In the City of São Paulo, schools in favelas and peripheral communities have historically struggled with high rates of teacher attrition (averaging 10% annually, with some schools experiencing rates as high as 30%) , disrupting educational continuity and student learning.

Our new paper  Impact of Monetary Incentives on Teacher Decisions to Leave and Choose Schools: Evidence from a Policy Reform in Sao Paulo analyzes how wage premiums affect teacher retention in one of Latin America’s largest school districts.

Working with Leonardo Rosa and Mateus Rodrigues, and supported by João Cossi who secured crucial data access and policy dialogue and Danielle Nascimento, we examined a reform offering 5-25% wage premiums based on schools’ historical turnover rates.

The study found that offering wage premiums of 5-25% significantly reduced teacher turnover, with notable results:

• Overall teacher turnover decreased by 18%
• Schools offering higher incentives (20-25% wage premium) saw a 30% reduction in turnover
• Higher incentives also improved student test scores by 0.3-0.6 standard deviations
• Schools became more attractive to new teachers, expanding the talent pool

The findings provide clear evidence that well-designed monetary incentives can help retain teachers in hard-to-staff schools while improving educational outcomes.