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Cross-Country Evidence on Teacher Performance Pay

  • Ludger Woessmann

The general-equilibrium effects of performance-related teacher pay include long-term incentive and teacher-sorting mechanisms that usually elude experimental studies but are captured in cross-country comparisons. Combining country-level performance-pay measures with rich PISA-2003 international achievement micro data, this paper estimates student-level international education production functions. The use of teacher salary adjustments for outstanding performance is significantly associated with math, science, and reading achievement across countries. Scores in countries with performance-related pay are about one quarter standard deviations higher. Results avoid bias from within-country selection and are robust to continental fixed effects and to controlling for non-performance-based forms of teacher salary adjustments.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2010/wp-cesifo-2010-08/cesifo1_wp3151.pdf
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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3151.

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Date of creation: 2010
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Handle: RePEc:ces:ceswps:_3151
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  1. Hanushek, Eric A. & Wößmann, Ludger, 2006. "Does educational tracking affect performance and inequality? differences-in-differences evidence across countries," Munich Reprints in Economics 20457, University of Munich, Department of Economics.
  2. Karthik Muralidharan & Venkatesh Sundararaman, 2011. "Teacher Performance Pay: Experimental Evidence from India," Journal of Political Economy, University of Chicago Press, vol. 119(1), pages 39 - 77.
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  4. Eric A. Hanushek & Steven G. Rivkin, 2010. "Generalizations about Using Value-Added Measures of Teacher Quality," American Economic Review, American Economic Association, vol. 100(2), pages 267-71, May.
  5. Martin R. West & Ludger Woessmann, 2008. "“Every Catholic Child in a Catholic School”: Historical Resistance to State Schooling, Contemporary Private Competition, and Student Achievement across Countries," CESifo Working Paper Series 2332, CESifo Group Munich.
  6. Jong-Wha Lee & Robert J. Barro, 1997. "Schooling Quality in a Cross Section of Countries," NBER Working Papers 6198, National Bureau of Economic Research, Inc.
  7. Dohmen Thomas & Falk Armin, 2010. "You get what you pay for: Incentives and Selection in the Education System," ROA Research Memorandum 002, Maastricht University, Research Centre for Education and the Labour Market (ROA).
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  9. Timothy Besley & Maitreesh Ghatak, 2006. "Sorting with Motivated Agents: Implications for School Competition and Teacher Incentives," Journal of the European Economic Association, MIT Press, vol. 4(2-3), pages 404-414, 04-05.
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  12. Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," Journal of Law, Economics and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
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  14. 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.
  15. Ballou, Dale, 2001. "Pay for performance in public and private schools," Economics of Education Review, Elsevier, vol. 20(1), pages 51-61, February.
  16. Eric A. Hanushek & Ludger Woessmann, 2010. "The Economics of International Differences in Educational Achievement," CESifo Working Paper Series 3037, CESifo Group Munich.
  17. 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.
  18. Wößmann, Ludger, 2005. "Educational production in Europe," Munich Reprints in Economics 19656, University of Munich, Department of Economics.
  19. Caroline M. Hoxby & Andrew Leigh, 2004. "Pulled Away or Pushed Out? Explaining the Decline of Teacher Aptitude in the United States," American Economic Review, American Economic Association, vol. 94(2), pages 236-240, May.
  20. Wößmann, Ludger, 2003. "Schooling resources, educational institutions and student performance: The international evidence," Munich Reprints in Economics 19661, University of Munich, Department of Economics.
  21. Michael J. Podgursky & Matthew G. Springer, 2007. "Teacher performance pay: A review," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 26(4), pages 909-950.
  22. Peter Dolton & Oscar D. Marcenaro‐Gutierrez, 2011. "If you pay peanuts do you get monkeys? A cross‐country analysis of teacher pay and pupil performance," Economic Policy, CEPR;CES;MSH, vol. 26(65), pages 5-55, January.
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