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Evaluating the impact of performance-related pay for teachers in England

  • Atkinson, Adele
  • Burgess, Simon
  • Croxson, Bronwyn
  • Gregg, Paul
  • Propper, Carol
  • Slater, Helen
  • Wilson, Deborah

This paper evaluates the impact of a performance-related pay scheme for teachers in England. Using data which matches individual pupils to individual teachers, and contains both test scores and value-added, we test whether the introduction of a payment scheme based on pupil attainment increased teacher effort. Our evaluation design controls for pupil effects, school effects and teacher effects, and adopts a difference-in-difference methodology. We find that the scheme did improve test scores and value added increased on average by about 40% of a grade per pupil.

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Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 16 (2009)
Issue (Month): 3 (June)
Pages: 251-261

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Handle: RePEc:eee:labeco:v:16:y:2009:i:3:p:251-261
Contact details of provider: Web page: http://www.elsevier.com/locate/labeco

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  1. Daniel Aaronson & Lisa Barrow & William Sander, 2002. "Teachers and student achievement in the Chicago public high schools," Working Paper Series WP-02-28, Federal Reserve Bank of Chicago.
  2. Thomas S. Dee & Benjamin J. Keys, 2004. "Does merit pay reward good teachers? Evidence from a randomized experiment," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 23(3), pages 471-488.
  3. Gerald Marschke & Pascal Courty, 2000. "Performance Incentives with Award Constraints," Discussion Papers 00-11, University at Albany, SUNY, Department of Economics.
  4. Paul Glewwe & Nauman Ilias & Michael Kremer, 2003. "Teacher Incentives," NBER Working Papers 9671, National Bureau of Economic Research, Inc.
  5. Murphy, Kevin J., 1999. "Executive compensation," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 38, pages 2485-2563 Elsevier.
  6. Cooper, Samuel T. & Cohn, Elchanan, 1997. "Estimation of a frontier production function for the South Carolina educational process," Economics of Education Review, Elsevier, vol. 16(3), pages 313-327, June.
  7. Simon Burgess & Marisa Ratto, 2003. "The Role of Incentives in the Public Sector: Issues and Evidence," Oxford Review of Economic Policy, Oxford University Press, vol. 19(2), pages 285-300, Summer.
  8. Randall W. Eberts & Kevin Hollenbeck & Joe A. Stone, . "Teacher Performance Incentives and Student Outcomes," Upjohn Working Papers and Journal Articles rwekhjs2002, W.E. Upjohn Institute for Employment Research.
  9. Canice Prendergast, 1999. "The Provision of Incentives in Firms," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 7-63, March.
  10. Victor Lavy, 2004. "Performance Pay and Teachers' Effort, Productivity and Grading Ethics," NBER Working Papers 10622, National Bureau of Economic Research, Inc.
  11. Simon Burgess & Marisa Ratto, 2003. "The Role of Incentives in the Public Sector: Issues and Evidence," The Centre for Market and Public Organisation 03/071, Department of Economics, University of Bristol, UK.
  12. Charles T. Clotfelter & Helen F. Ladd & Jacob L. Vigdor, 2007. "How and Why do Teacher Credentials Matter for Student Achievement?," NBER Working Papers 12828, National Bureau of Economic Research, Inc.
  13. 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.
  14. 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.
  15. 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.
  16. 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.
  17. Stephen French & David Marsden, 1998. "What A Performance: Performance Related Pay In The Public Services," CEP Special Papers 10, Centre for Economic Performance, LSE.
  18. Avinash Dixit, 2002. "# Incentives and Organizations in the Public Sector: An Interpretative Review," Journal of Human Resources, University of Wisconsin Press, vol. 37(4), pages 696-727.
  19. Edward P. Lazear, 1999. "Personnel Economics: Past Lessons and Future Directions," NBER Working Papers 6957, National Bureau of Economic Research, Inc.
  20. Kahn, Charles M & Silva, Emilson C D & Ziliak, James P, 2001. "Performance-Based Wages in Tax Collection: The Brazilian Tax Collection Reform and Its Effects," Economic Journal, Royal Economic Society, vol. 111(468), pages 188-205, January.
  21. David Marsden, 2000. "Teachers Before the Threshold," CEP Discussion Papers dp0454, Centre for Economic Performance, LSE.
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