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Does Raising the Principal's Wage Improve the School's Outcomes? Quasi-experimental Evidence from an Unusual Policy Experiment in Israel

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  • Victor Lavy

Abstract

This paper reports estimates of the causal effects of a 50 percent increase in the salary of headmasters of high schools in Israel. The results suggest that the program led to significant improvements in twelfth-grade students' academic achievements. However, the effect was relatively modest, comprising increases of about 5-10 percent in the school mean matriculation rate, average score and number of subjects and credit units taken in matriculation programs. Based on these results and the lack of evidence regarding the effect of increasing teachers' salary, it seems that priority should be given to paying higher wages to school principals. Copyright © The editors of the "Scandinavian Journal of Economics" 2008 .

Suggested Citation

  • Victor Lavy, 2008. "Does Raising the Principal's Wage Improve the School's Outcomes? Quasi-experimental Evidence from an Unusual Policy Experiment in Israel," Scandinavian Journal of Economics, Wiley Blackwell, vol. 110(4), pages 639-662, December.
  • Handle: RePEc:bla:scandj:v:110:y:2008:i:4:p:639-662
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    References listed on IDEAS

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    1. Kenny, Lawrence W. & Denslow, David Jr., 1980. "Compensating differentials in teachers' salaries," Journal of Urban Economics, Elsevier, vol. 7(2), pages 198-207, March.
    2. Eric A. Hanushek & EJohn F. Kain & Steven G. Rivkin, 2004. "Why Public Schools Lose Teachers," Journal of Human Resources, University of Wisconsin Press, vol. 39(2).
    3. Richard J. Murnane & Randall J. Olsen, 1990. "The Effects of Salaries and Opportunity Costs on Length of Stay in Teaching: Evidence from North Carolina," Journal of Human Resources, University of Wisconsin Press, vol. 25(1), pages 106-124.
    4. Levinson, Arik M., 1988. "Reexamining teacher preferences and compensating wages," Economics of Education Review, Elsevier, vol. 7(3), pages 357-364, June.
    5. Ashenfelter, Orley C, 1978. "Estimating the Effect of Training Programs on Earnings," The Review of Economics and Statistics, MIT Press, vol. 60(1), pages 47-57, February.
    6. Murnane, Richard J & Olsen, Randall J, 1989. "The Effects of Salaries and Opportunity Costs on Duration in Teaching: Evidence from Michigan," The Review of Economics and Statistics, MIT Press, vol. 71(2), pages 347-352, May.
    7. Rumberger, Russell W., 1987. "The impact of salary differentials on teacher shortages and turnover: The case of mathematics and science teachers," Economics of Education Review, Elsevier, vol. 6(4), pages 389-399, August.
    8. Susanna Loeb & Marianne E. Page, 2000. "Examining The Link Between Teacher Wages And Student Outcomes: The Importance Of Alternative Labor Market Opportunities And Non-Pecuniary Variation," The Review of Economics and Statistics, MIT Press, vol. 82(3), pages 393-408, August.
    9. Dale Ballou & Michael Podgursky, 1995. "Recruiting Smarter Teachers," Journal of Human Resources, University of Wisconsin Press, vol. 30(2), pages 326-338.
    10. 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.
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    Cited by:

    1. Wellens, Lore & Jegers, Marc, 2014. "Effective governance in nonprofit organizations: A literature based multiple stakeholder approach," European Management Journal, Elsevier, vol. 32(2), pages 223-243.
    2. Adriana Di Liberto & Fabiano Schivardi & Giovanni Sulis, 2015. "Managerial practices and student performance," Economic Policy, CEPR;CES;MSH, vol. 30(84), pages 683-728.
    3. Coelli, Michael & Green, David A., 2012. "Leadership effects: school principals and student outcomes," Economics of Education Review, Elsevier, vol. 31(1), pages 92-109.
    4. Miller, Ashley, 2013. "Principal turnover and student achievement," Economics of Education Review, Elsevier, vol. 36(C), pages 60-72.
    5. Richard Cebula & Franklin Mixon & Mark Montez, 2015. "Teachers’ salaries and human capital, and their effects on academic performance: an institution-level analysis of Los Angeles County high schools," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 39(2), pages 347-356, April.

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