Impact of Monetary Incentives on Teacher Decisions to Leave and Choose Schools: Evidence from a Policy Reform in Sao Paulo

Teacher turnover is a major challenge for human resource management in schools, adversely affecting student learning. This paper examines the impact of a monetary incentive program introduced in 2022 in the city of Sao Paulo, Brazil, which aims to reduce teacher turnover by allocating wage premiums ranging from 5% to 25% of base salary based on schools’ turnover levels. Results show a significant reduction in turnover: an average decrease of 18% across all schools, with an even more pronounced 30% reduction in schools offering higher incentives. Notably, the program also attracted new teachers to these higher-incentive schools.