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Teacher Incentives

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Author Info
Jaag, Christian

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Abstract

This paper considers hidden teacher effort in educational production and discusses the implications of multiple teacher effort dimensions on optimum incentive contracts in a theoretical framework. The analysis of educational production in a multitask framework is a new and unique contribution of this paper to the economics of education. We first characterize the first-best and second-best outcomes. The model is extended to address specific questions concerning teacher incentive schemes: We compare input- to output-based accountability measures and study the implication of the level of aggregation in performance measures. Against the background of the empirical evidence on the effectiveness of teacher incentives, we argue that performance measures should be as broad as possible. Further, we present the optimum contract for motivated teachers. Finally, if education is produced in teacher teams, we establish the conditions for optimum team-based and individual incentives: The larger the spillover effects across teacher efforts and the better the measurability of educational achievement, the stronger the case for team-based incentives.

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File URL: http://mpra.ub.uni-muenchen.de/340/
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 340.

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Date of creation: 2006
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Handle: RePEc:pra:mprapa:340

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Find related papers by JEL classification:
M52 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Hendrik Jürges & Wolfram Richter & Kerstin Schneider, 2004. "Teacher Quality and Incentives: Theoretical and Empirical Effects of Standards on Teacher Quality," CESifo Working Paper Series CESifo Working Paper No. , CESifo GmbH. [Downloadable!]
    Other versions:
  2. Holmstrom, Bengt & Milgrom, Paul, 1987. "Aggregation and Linearity in the Provision of Intertemporal Incentives," Econometrica, Econometric Society, vol. 55(2), pages 303-28, March. [Downloadable!] (restricted)
    Other versions:
  3. Randall Eberts & Kevin Hollenbeck & Joe Stone, 2000. "Teacher Performance Incentives and Student Outcomes," Staff Working Papers 00-65, W.E. Upjohn Institute for Employment Research. [Downloadable!] (restricted)
  4. Victor Lavy, 2002. "Evaluating the Effect of Teachers' Group Performance Incentives on Pupil Achievement," Journal of Political Economy, University of Chicago Press, vol. 110(6), pages 1286-1317, December. [Downloadable!] (restricted)
  5. Richards, Craig E. & Sheu, Tian Ming, 1992. "The South Carolina school incentive reward program: A policy analysis," Economics of Education Review, Elsevier, vol. 11(1), pages 71-86, March. [Downloadable!] (restricted)
  6. Paul Glewwe & Nauman Ilias & Michael Kremer, 2003. "Teacher Incentives," NBER Working Papers 9671, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  7. Rogerson, William P, 1985. "The First-Order Approach to Principal-Agent Problems," Econometrica, Econometric Society, vol. 53(6), pages 1357-67, November. [Downloadable!] (restricted)
  8. Ladd, Helen F., 1999. "The Dallas school accountability and incentive program: an evaluation of its impacts on student outcomes," Economics of Education Review, Elsevier, vol. 18(1), pages 1-16, February. [Downloadable!] (restricted)
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  9. Eric A. Hanushek & Margaret E. Raymond, 2004. "Does School Accountability Lead to Improved Student Performance?," NBER Working Papers 10591, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  10. Christian Jaag, 2005. "Hidden Teacher Effort in Educational Production: Monitoring vs. Merit Pay," HEW 0503003, EconWPA. [Downloadable!]
  11. Thomas J. Kane & Douglas O. Staiger, 2001. "Improving School Accountability Measures," NBER Working Papers 8156, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  12. Edward P. Lazear, 1999. "Output-based Pay: Incentives or Sorting?," NBER Working Papers 7419, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  13. Ernst Fehr & Klaus M. Schmidt, . "Fairness and Incentives in a Multi-Task Principal-Agent Model," IEW - Working Papers iewwp191, Institute for Empirical Research in Economics - IEW. [Downloadable!]
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  14. Brian A. Jacob, 2002. "Accountability, Incentives and Behavior: The Impact of High-Stakes Testing in the Chicago Public Schools," NBER Working Papers 8968, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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