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Rawlsian versus Utilitarian: Teachers' Incentives and the Distribution of Student Performance

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  • Yongzheng Liu
  • Yongsheng Xu

Abstract

By using the test score of the least able student in a classroom as the objective function (Rawlsian optimum), this paper examines the implications for teachers' incentives and compares them with the objective that uses the average test score of all the students in a classroom (utilitarian optimum). We show that for certain human-capital production functions and teachers' effort cost functions, the Rawlsian optimum yields at least the same average human capital as the utilitarian optimum, but that the resulting distribution of human capital under the former is more equitable than that under the latter.

Suggested Citation

  • Yongzheng Liu & Yongsheng Xu, 2018. "Rawlsian versus Utilitarian: Teachers' Incentives and the Distribution of Student Performance," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 174(3), pages 548-569, September.
    • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(201809)174:3_548:rvutia_2.0.tx_2-f
    DOI: 10.1628/093245618X15148781960606
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    More about this item

    Keywords

    social objective; teachers' incentives; Rawlsian optimum; utilitarian optimum; equity; tournament;
    All these keywords.

    JEL classification:

    • D60 - Microeconomics - - Welfare Economics - - - General
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods

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