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Incentive Strength and Teacher Productivity: Evidence from a Group-Based Teacher Incentive Pay System

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  • Scott A. Imberman

    (Michigan State University and NBER)

  • Michael F. Lovenheim

    (Cornell University and NBER)

Abstract

We estimate the impact of incentive strength on achievement under a group-based teacher incentive pay program. The system provides variation in the share of students in a subject-grade that a teacher instructs, which proxies for incentive strength. We find that achievement on incentivized exams, but not nonincentivized exams, improves when incentives strengthen. For the incentivized exams, we find that effects fade out monotonically as a teacher's portion of the group increases to between 20 and 30 percentage and are larger for teachers with low-achieving students. Calculations based off these estimates show modest positive effects of the program overall. © 2015 The President and Fellows of Harvard College and the Massachusetts Institute of Technology

Suggested Citation

  • Scott A. Imberman & Michael F. Lovenheim, 2015. "Incentive Strength and Teacher Productivity: Evidence from a Group-Based Teacher Incentive Pay System," The Review of Economics and Statistics, MIT Press, vol. 97(2), pages 364-386, May.
    • Handle: RePEc:tpr:restat:v:97:y:2015:i:2:p:364-386
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    Cited by:

    1. Evan Riehl & Meredith Welch, 2023. "Accountability, Test Prep Incentives, and the Design of Math and English Exams," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 42(1), pages 60-96, January.
    2. Yim, Hyejin & Katare, Bhagyashree & Cuffey, Joel, 2022. "Does Increasing Minimum Wage Impact Service Quality? Evidence from Restaurant Food Safety Inspections," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322411, Agricultural and Applied Economics Association.
    3. Mehta, Nirav, 2018. "The potential output gains from using optimal teacher incentives: An illustrative calibration of a hidden action model," Economics of Education Review, Elsevier, vol. 66(C), pages 67-72.
    4. Alison Wellington & Hanley Chiang & Kristin Hallgren & Cecilia Speroni & Mariesa Herrmann & Paul Burkander, "undated". "Evaluation of the Teacher Incentive Fund: Implementation and Impacts of Pay-for-Performance After Three Years (Final Report)," Mathematica Policy Research Reports c01a81e283374843b1d4b39ce, Mathematica Policy Research.
    5. Julie Berry Cullen & Cory Koedel & Eric Parsons, 2021. "The Compositional Effect of Rigorous Teacher Evaluation on Workforce Quality," Education Finance and Policy, MIT Press, vol. 16(1), pages 7-41, Winter.
    6. Hugh Macartney & Robert McMillan & Uros Petronijevic, 2018. "Teacher Value-Added and Economic Agency," NBER Working Papers 24747, National Bureau of Economic Research, Inc.
    7. Lagarde, Mylène & Riumallo Herl, Carlos, 2025. "Better together? Group incentives and the demand for prevention," Journal of Development Economics, Elsevier, vol. 172(C).
    8. Nirav Mehta, 2025. "A Partial Identification Approach to Identifying the Determinants of Human Capital Accumulation: An Application to Teachers," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 40(6), pages 639-654, September.
    9. Alejandro J. Ganimian & Richard J. Murnane, 2014. "Improving Educational Outcomes in Developing Countries: Lessons from Rigorous Impact Evaluations," NBER Working Papers 20284, National Bureau of Economic Research, Inc.
    10. Dahal,Mahesh & Nguyen,Quynh T., 2014. "Private non-state sector engagement in the provision of educational services at the primary and secondary levels in South Asia : an analytical review of its role in school enrollment and student achievement," Policy Research Working Paper Series 6899, The World Bank.
    11. Timothy Bond & Kevin Mumford, 2017. "Teacher Performance Pay in the United States: Incidence and Adult Outcomes," Purdue University Economics Working Papers 1289, Purdue University, Department of Economics.
    12. Audra Bowlus & Eda Bozkurt & Lance Lochner & Chris Robinson, 2017. "Wages and Employment: The Canonical Model Revisited," NBER Working Papers 24069, National Bureau of Economic Research, Inc.
    13. Cotofan, Maria, 2021. "Learning from praise: evidence from a field experiment with teachers," LSE Research Online Documents on Economics 112772, London School of Economics and Political Science, LSE Library.
    14. Figlio, D. & Karbownik, K. & Salvanes, K.G., 2016. "Education Research and Administrative Data," Handbook of the Economics of Education,, Elsevier.
    15. Pedro S. Martins & João R. Ferreira, 2025. "Effects of individual incentive reforms in the public sector: the case of teachers," Public Choice, Springer, vol. 204(3), pages 457-481, September.
    16. Andrea Lepine, 2016. "Teacher Incentives and Student Performance: Evidence from Brazil," Working Papers, Department of Economics 2016_18, University of São Paulo (FEA-USP).
    17. Brehm, Margaret & Imberman, Scott A. & Lovenheim, Michael F., 2017. "Achievement effects of individual performance incentives in a teacher merit pay tournament," Labour Economics, Elsevier, vol. 44(C), pages 133-150.
    18. Cotofan, Maria, 2021. "Learning from praise: Evidence from a field experiment with teachers," Journal of Public Economics, Elsevier, vol. 204(C).
    19. Gibbons, Stephen & Silva, Olmo & Weinhardt, Felix, 2017. "Neighbourhood Turnover and Teenage Attainment," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 15(4), pages 746-783.
    20. Hanley Chiang & Cecilia Speroni & Mariesa Herrmann & Kristin Hallgren & Paul Burkander & Alison Wellington, "undated". "Evaluation of the Teacher Incentive Fund: Final Report on Implementation and Impacts of Pay-for-Performance Across Four Years," Mathematica Policy Research Reports 568955b06a2a4b11b954dded8, Mathematica Policy Research.
    21. Lagarde, Mylène & Riumallo Herl, Carlos, 2025. "Better together? Group incentives and the demand for prevention," LSE Research Online Documents on Economics 125349, London School of Economics and Political Science, LSE Library.
    22. Johnston, Andrew C., 2021. "Preferences, Selection, and the Structure of Teacher Pay," IZA Discussion Papers 14831, IZA Network @ LISER.
    23. Berlinski, Samuel & Ramos, Alejandra, 2020. "Teacher mobility and merit pay: Evidence from a voluntary public award program," Journal of Public Economics, Elsevier, vol. 186(C).
    24. Pope, Nolan G., 2019. "The effect of teacher ratings on teacher performance," Journal of Public Economics, Elsevier, vol. 172(C), pages 84-110.
    25. Barrera-Osorio, Felipe & Raju, Dhushyanth, 2017. "Teacher performance pay: Experimental evidence from Pakistan," Journal of Public Economics, Elsevier, vol. 148(C), pages 75-91.

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    Keywords

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    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • I20 - Health, Education, and Welfare - - Education - - - General
    • H00 - Public Economics - - General - - - General
    • J00 - Labor and Demographic Economics - - General - - - General
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

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