Shortages in the teaching subfields of math, science, special and bilingual education have been one of the most persistent problems in teacher labor markets. This problem is in part due to the single salary schedule by which most public school teachers are paid, and which usually only gives pay increases for years of experience and additional credentials. However, in recent years, to combat shortages a minority of school districts have begun to offer additional financial incentives to teachers in shortage-fields. However, there has been little rigorous empirical evidence on whether these incentives are effective for changing labor market outcomes. Utilizing an Instrumental Variables Difference-in-Differences model with a novel instrument, I estimate whether districts that provide such incentives report better recruitment conditions and experience higher rates of retention of shortage-field teachers than comparable districts that do not offer incentives. I find positive and statistically significant impacts on retention.

Findings are discussed in terms of estimated incentive magnitudes, as well as in light of a document review of collectively bargained contracts from districts that provide shortage-field incentives.