Recruitment of rural teachers in developing countries: an economic analysis

Monetary and non-monetary incentives for rural teacher recruitment are a prominent feature of developing-country education systems. Despite the widespread use of incentives, there is little theoretical or empirical evidence on their effectiveness. This paper interprets incentive policies within the framework of the economic theory of compensating differentials. The discussion clarifies the implicit assumptions of incentive policies and aids in organizing further empirical work on their effectiveness. Existing evidence on compensating differentials, mainly in the United States, shows that teachers tend to trade off monetary wages against non-monetary aspects of their jobs, such as geographic location and class size.