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Teacher opinions on performance pay: Evidence from India

  • Muralidharan, Karthik
  • Sundararaman, Venkatesh

The practical viability of performance-based pay programs for teachers depends critically on the extent of support the idea will receive from teachers. We present evidence on teacher opinions with regard to performance-based pay from teacher interviews conducted in the context of an experimental evaluation of a program that provided performance-based bonuses to teachers in the Indian state of Andhra Pradesh. We report four main findings in this paper: (1) over 80% of teachers had a favorable opinion about the idea of linking a component of pay to measures of performance, (2) exposure to an actual incentive program increased teacher support for the idea, (3) teacher support declines with age, experience, training, and base pay, and (4) the extent of teachers' stated ex ante support for performance-linked pay (over a series of mean-preserving spreads of pay) is positively correlated with their ex post performance as measured by estimates of teacher value addition. This suggests that teachers are aware of their own effectiveness and that implementing a performance-linked pay program could not only have broad-based support among teachers but also attract more effective teachers into the teaching profession.

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Article provided by Elsevier in its journal Economics of Education Review.

Volume (Year): 30 (2011)
Issue (Month): 3 (June)
Pages: 394-403

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Handle: RePEc:eee:ecoedu:v:30:y:2011:i:3:p:394-403
Contact details of provider: Web page: http://www.elsevier.com/locate/econedurev

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  1. Fehr, Ernst & Falk, Armin, 2002. "Psychological foundations of incentives," European Economic Review, Elsevier, vol. 46(4-5), pages 687-724, May.
  2. 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.
  3. Dante Contreras G. & Tomás Rau B., 2009. "Tournaments, gift exchanges, and the effect of monetary incentives for teachers: the case of Chile," Working Papers wp305, University of Chile, Department of Economics.
  4. Edward P. Lazear, 2000. "Performance Pay and Productivity," American Economic Review, American Economic Association, vol. 90(5), pages 1346-1361, December.
  5. Figlio, David N. & Kenny, Lawrence W., 2007. "Individual teacher incentives and student performance," Journal of Public Economics, Elsevier, vol. 91(5-6), pages 901-914, June.
  6. Jonah E. Rockoff, 2004. "The Impact of Individual Teachers on Student Achievement: Evidence from Panel Data," American Economic Review, American Economic Association, vol. 94(2), pages 247-252, May.
  7. Karthik Muralidharan & Venkatesh Sundararaman, 2009. "Teacher Performance Pay: Experimental Evidence from India," NBER Working Papers 15323, National Bureau of Economic Research, Inc.
  8. Dale Ballou & Michael Podgursky, 1993. "Teachers' attitudes toward merit pay: Examining conventional wisdom," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 47(1), pages 50-61, October.
  9. Eric A. Hanushek & John F. Kain & Steven G. Rivkin, 1998. "Teachers, Schools, and Academic Achievement," NBER Working Papers 6691, National Bureau of Economic Research, Inc.
  10. Adele Atkinson & Simon Burgess & Bronwyn Croxson & Paul Gregg, 2004. "Evaluating the Impact of Performance-related Pay for Teachers in England," The Centre for Market and Public Organisation 04/113, Department of Economics, University of Bristol, UK.
  11. Caroline M. Hoxby & Andrew Leigh, 2004. "Pulled Away or Pushed Out? Explaining the Decline of Teacher Aptitude in the United States," American Economic Review, American Economic Association, vol. 94(2), pages 236-240, May.
  12. Victor Lavy, 2009. "Performance Pay and Teachers' Effort, Productivity, and Grading Ethics," American Economic Review, American Economic Association, vol. 99(5), pages 1979-2011, December.
  13. Michael Kremer & Nazmul Chaudhury & F. Halsey Rogers & Karthik Muralidharan & Jeffrey Hammer, 2005. "Teacher Absence in India: A Snapshot," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 658-667, 04/05.
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