The impact of pay and financial incentives on teacher supply

By Jack Worth, Sarah Tang and Maria Galvis

23 June 2022

This research by NFER, supported by the Gatsby Foundation, explores the impact of pay and financial incentives on shortage subject teacher supply. We find evidence that a number of economic and financial factors are associated with higher teacher recruitment, including higher teacher pay and bursaries and a weaker wider labour market.

Using these insights, we forecast future teacher supply with a scenario-testing model that integrates teacher recruitment and retention.

Key Findings

  • The Department for Education’s (DfE) proposals on teacher pay, combined with the other financial incentives such as the ‘levelling up premium’, are unlikely to result in an adequate supply of teachers in England in 2022-2025, particularly in Science, Technology, Engineering and Maths (STEM) subjects.
  • To improve teacher supply, the Government should introduce additional financial incentives, including increasing bursaries and applying the ‘levelling up premium’ early-career retention payment to all teachers of shortage subjects in England.
  • Combinations of additional financial measures could support the improvement of teacher supply in physics and computing, but no reasonable set of measures are compatible with the current target being met. In relation to physics, this finding should prompt debate about how the education system can realistically and sustainably staff science departments in schools with a range of specialists.