Your Pay or Someone Else's? Exploring Salary Dispersion, Position, and Principal Turnover

Abstract This study explores ways in which salary can be structured to reduce leadership shortages by investigating how comparative wage dispersion and position alter the relationship of salary to principal turnover. Using a seventeen-year longitudinal dataset covering over sixteen thousand principals in Texas, discrete-time hazard models demonstrate that principals are highly sensitive to salary comparisons over and above basic salary. Higher comparative position is associated with significantly reduced turnover risk, while wider dispersion is associated with a significantly increased turnover risk. Interactions demonstrate that dispersion and position act in tandem to create conditions where principals have particularly high turnover risk. These results have implications for strategies to address turnover through district salary structures, as well as broader notions of how wage tournaments operate in the principal labor market.