As Stanford University economic researcher Barbara Biasi explains in a new study (which is awaiting peer review), Act 10 created a marketplace for teachers in which public-school districts can compete for better employees. For instance, a district can pay more to recruit and retain “high-value added” teachers—that is, those who most improve student learning. Districts can also cap salaries of low-performing teachers, which might encourage them to quit or leave for other districts.

The 2011 Wisconsin law, known as Act 10, limited collective bargaining to base wages while letting school districts negotiate pay with individual teachers based on criteria other than years on the job and education level. Some districts like Green Bay have used the law to reward teacher performance while others such as Racine have adhered to seniority-based salary schedules.

Prior research on Washington, D.C.’s teacher-tenure reforms and merit pay has found that financial incentives improved the performance of highly rated teachers while dismissal threats led to attrition among ineffective ones. Student achievement has risen as a result. Act 10 provides an opportunity to evaluate how changes in contract negotiations affect teaching quality.

As Stanford University economic researcher Barbara Biasi explains in a new study (which is awaiting peer review), Act 10 created a marketplace for teachers in which public-school districts can compete for better employees. For instance, a district can pay more to recruit and retain “high-value added” teachers—that is, those who most improve student learning. Districts can also cap salaries of low-performing teachers, which might encourage them to quit or leave for other districts.

Ms. Biasi analyzed how the demand for and supply of teachers changed across districts with individual-salary negotiations from those that kept uniform pay schedules. She found that the share of teachers moving from salary-schedule to individual-salary districts, and vice versa, roughly doubled between 2012 and 2014 from the five years prior to the law’s enactment.

She also found changes in salary structure. For instance, salaries in Green Bay increased about 13% for teachers with five to six years of experience but a mere 4% for those who had worked 29 or 30 years. Salaries among teachers with the same seniority also diverged more. In Racine the opposite occurred. Green Bay was able to pay better teachers more without regard to the lock-step pay scales traditionally dictated by unions.

Ms. Biasi found that better teachers gravitate to districts where they can negotiate their own pay while lousy teachers tend to migrate toward those where salary scales are regimented. The study found “a 34 percent increase in the quality of teachers moving from salary schedule to individual-salary districts, and a 17 percent decrease in the quality of teachers exiting individual-salary districts.”

“These sorting patterns,” Ms. Biasi concludes, “lead to a small increase in average quality of the teaching workforce in individual-salary districts.” Student math achievement rose significantly in individual-salary districts relative to salary-schedule districts due in part to improvements in the teacher workforce.

Much more on ACT 10, here.

Oconomowoc raised teacher salaries and increased high school teaching time.