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How effective are financial incentives for teachers?

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  • Scott A. Imberman

    (Michigan State University, USA)

Abstract

Concerns about poor student performance have led schools to diverge from traditional teacher compensation and base a portion of pay on student outcomes. In the US, the number of school districts adopting such performance-based financial incentives has increased by more than 40% since 2004. Evidence on individual incentives in developed countries is mixed, with some positive and some negligible impacts. There is less evidence for developing countries, but several studies indicate that incentives can be highly effective and far cheaper to implement. Innovative incentive mechanisms such as incentives based on relative student performance show promise.

Suggested Citation

  • Scott A. Imberman, 2015. "How effective are financial incentives for teachers?," IZA World of Labor, Institute of Labor Economics (IZA), pages 158-158, June.
    • Handle: RePEc:iza:izawol:journl:y:2015:n:158
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    References listed on IDEAS

    as
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    Cited by:

    1. Clare Leaver & Owen Ozier & Pieter Serneels & Andrew Zeitlin, 2021. "Recruitment, Effort, and Retention Effects of Performance Contracts for Civil Servants: Experimental Evidence from Rwandan Primary Schools," American Economic Review, American Economic Association, vol. 111(7), pages 2213-2246, July.
    2. Isaac Mbiti & Mauricio Romero & Youdi Schipper, 2023. "Designing Effective Teacher Performance Pay Programs: Experimental Evidence from Tanzania," The Economic Journal, Royal Economic Society, vol. 133(653), pages 1968-2000.
    3. Daniel Jones & Mirco Tonin & Michael Vlassopoulos, 2018. "Paying for what kind of Performance? Performance Pay and Multitasking in Mission-Oriented Jobs," CESifo Working Paper Series 7156, CESifo.
    4. Pauline Givord & Milena Suarez Castillo, 2021. "What Makes a Good High School? Measuring School Effects beyond the Average," Economie et Statistique / Economics and Statistics, Institut National de la Statistique et des Etudes Economiques (INSEE), issue 528-529, pages 29-45.
    5. Eunice S. Han, 2020. "The Myth of Unions’ Overprotection of Bad Teachers: Evidence from the District–Teacher Matched Data on Teacher Turnover," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 59(2), pages 316-352, April.
    6. Emma García & Eunice S. Han, 2022. "Teachers’ Base Salary and Districts’ Academic Performance: Evidence From National Data," SAGE Open, , vol. 12(1), pages 21582440221, March.

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    More about this item

    Keywords

    teacher incentives; student achievement; pay-for-performance; merit pay;
    All these keywords.

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

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