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Individual Teacher Incentives, Student Achievement and Grade Inflation

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  • Pedro Martins

Abstract

How do teacher incentives affect student achievement? We contribute to this question by examining the effects of the recent introduction of teacher performance-related pay and tournaments in Portugal's public schools. Specifically, we draw on matched student-school panel data covering the population of secondary school national exams over seven years. We then conduct a difference-in-differences analysis based on two complementary control groups: public schools in two autonomous regions that were exposed to lighter versions of the reform than in the rest of the country; and private schools, which are also subject to the same national exams but whose teachers were not affected by the reform. Our results consistently indicate that the increased focus on individual teacher performance caused a significant decline in student achievement, particularly in terms of national exams. The triple-difference results also document a significant increase in grade inflation.
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Suggested Citation

  • Pedro Martins, 2010. "Individual Teacher Incentives, Student Achievement and Grade Inflation," CEE Discussion Papers 0112, Centre for the Economics of Education, LSE.
    • Handle: RePEc:cep:ceedps:0112
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    File URL: https://cep.lse.ac.uk/pubs/download/cee/ceedp112.pdf
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    References listed on IDEAS

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    1. Ernst Fehr & Klaus M. Schmidt, 1999. "A Theory of Fairness, Competition, and Cooperation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(3), pages 817-868.
    2. Oriana Bandiera & Iwan Barankay & Imran Rasul, 2005. "Social Preferences and the Response to Incentives: Evidence from Personnel Data," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(3), pages 917-962.
    3. Ernst Fehr & Klaus M. Schmidt, 2004. "Fairness and Incentives in a Multi‐task Principal–Agent Model," Scandinavian Journal of Economics, Wiley Blackwell, vol. 106(3), pages 453-474, October.
    4. Atkinson, Adele & Burgess, Simon & Croxson, Bronwyn & Gregg, Paul & Propper, Carol & Slater, Helen & Wilson, Deborah, 2009. "Evaluating the impact of performance-related pay for teachers in England," Labour Economics, Elsevier, vol. 16(3), pages 251-261, June.
    5. Daniel Aaronson & Lisa Barrow & William Sander, 2007. "Teachers and Student Achievement in the Chicago Public High Schools," Journal of Labor Economics, University of Chicago Press, vol. 25(1), pages 95-135.
    6. Gadi Barlevy & Derek Neal, 2012. "Pay for Percentile," American Economic Review, American Economic Association, vol. 102(5), pages 1805-1831, August.
    7. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 249-275.
    8. Randall Eberts & Kevin Hollenbeck & Joe Stone, 2002. "Teacher Performance Incentives and Student Outcomes," Journal of Human Resources, University of Wisconsin Press, vol. 37(4), pages 913-927.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. What explains the Portuguese PISA results?
      by Pedro S. Martins in The Portuguese Economy on 2011-01-05 21:30:00

    Citations

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    Cited by:

    1. Burgard, Claudia & Grave, Barbara S., 2013. "Does it Pay Off to Incentivize Universities? – Performance Funding in the German Higher Education System," Ruhr Economic Papers 457, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    2. Andrea Lepine, 2016. "Teacher Incentives and Student Performance: Evidence from Brazil," Working Papers, Department of Economics 2016_18, University of São Paulo (FEA-USP).
    3. Lockheed, Marlaine E., 2014. "Teacher opinions on performance incentives : evidence from the Kyrgyz Republic," Policy Research Working Paper Series 6752, The World Bank.
    4. repec:zbw:rwirep:0457 is not listed on IDEAS
    5. Silva, Pedro Luís & DesJardins, Stephen L. & Biscaia, Ricardo & Sá, Carla & Teixeira, Pedro N., 2023. "Public and Private School Grade Inflations Patterns in Secondary Education," IZA Discussion Papers 16016, Institute of Labor Economics (IZA).
    6. Bauer, Thomas K. & Grave, Barbara S., 2011. "Performance-related Funding of Universities – Does more Competition Lead to Grade Inflation?," Ruhr Economic Papers 288, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    7. Ehlers, Tim & Schwager, Robert, 2012. "Honest Grading, Grade Inflation and Reputation," VfS Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62051, Verein für Socialpolitik / German Economic Association.
    8. Martins, Pedro S., 2017. "Can Non-Cognitive Skills Programs Improve Achievement? Quasi-Experimental Evidence from EPIS," GLO Discussion Paper Series 105, Global Labor Organization (GLO).
    9. repec:zbw:rwirep:0288 is not listed on IDEAS
    10. repec:got:cegedp:143 is not listed on IDEAS
    11. Tim Ehlers & Robert Schwager, 2016. "Honest Grading, Grade Inflation, and Reputation," CESifo Economic Studies, CESifo Group, vol. 62(3), pages 506-521.
    12. Ehlers, Tim & Schwager, Robert, 2012. "Honest grading, grade inflation and reputation," University of Göttingen Working Papers in Economics 143, University of Goettingen, Department of Economics.
    13. repec:spo:wpmain:info:hdl:2441/1jgbspo1909q48svne93o55rca is not listed on IDEAS
    14. Thomas K. Bauer & Barbara S. Grave, 2011. "Performance-related Funding of Universities – Does more Competition Lead to Grade Inflation?," Ruhr Economic Papers 0288, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    15. Claudia Burgard & Barbara S. Grave, 2013. "Does it Pay Off to Incentivize Universities? – Performance Funding in the German Higher Education System Abstract: This paper analyzes the effect of the introduction of performance-related funding in ," Ruhr Economic Papers 0457, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    16. Alexis Le Chapelain, 2014. "Market for education and student achievement [Marché de l’éducation et réussite scolaire]," SciencePo Working papers tel-03510563, HAL.
    17. repec:hal:spmain:info:hdl:2441/1jgbspo1909q48svne93o55rca is not listed on IDEAS

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    More about this item

    Keywords

    Teacher incentives; pupil attainment;

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

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