Risk Aversion and Support for Merit Pay: Theory and Evidence from Minnesota's Q Comp Program
AbstractRecent research attributes the lack of merit pay in teaching to the resistance of teachers. This article examines whether the structure of merit pay affects the types of teachers who support it. We develop a model of the relative utility teachers receive from merit pay versus the current fixed schedule of raises. We show that if teachers are risk averse, teachers with higher base salaries would be more likely to support a merit pay program that allows them to keep their current base salary and risk only future salary increases. We test the predictions of the model using data from a new merit pay program, the Minnesota Q Comp program, which requires the approval of the teachers in each school district. Consistent with the model's predictions, we find that districts with higher base salaries and a higher proportion of teachers with master's degrees are more likely to approve merit pay. © 2011 Association for Education Finance and Policy
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by MIT Press in its journal Education Finance and Policy.
Volume (Year): 6 (2011)
Issue (Month): 1 (January)
Contact details of provider:
Web page: http://mitpress.mit.edu/journals/
Find related papers by JEL classification:
- I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
- I22 - Health, Education, and Welfare - - Education - - - Educational Finance
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Karie Kirkpatrick).
If references are entirely missing, you can add them using this form.