This working paper evaluates the three-year labor market impacts of Washington, DC’s PEF, the nation’s first dedicated public funding stream to raise CCEE educator compensation at a scale intended to address pay gaps with public school teachers. Launched in 2022, the PEF provided annual direct payments of $10,000 to $14,000 to more than 4,000 educators before shifting to a facility payment model tied to a newly established public school-based salary scale. In 2023, the program also began providing access to subsidized health insurance.

Using federal labor market data and a synthetic control design, we find that the PEF increased the size of the CCEE workforce, with positive effects generally growing over time, and raised employer-reported wages following the shift to routing program funds through employer payroll under the facility payment model. These results provide evidence that sustained educator compensation policies can influence labor supply by supporting retention and recruitment in a sector long characterized by low wages and persistent staffing shortages. At the same time, findings suggest that workforce growth occurred primarily within existing establishments rather than through the creation of new ones, both reflecting facility priorities to fill vacancies and increase staffing and potential wage compression between educators and administrators that may weaken incentives to assume leadership roles or open new businesses. Findings are robust to alternative samples, designs, and specifications. We discuss how our results have informed decisions about the future of the PEF in Washington, DC, and the design of compensation initiatives in other states and localities.