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Promotion Incentives in the Public Sector: Evidence from Chinese Schools

Listed author(s):
  • Karachiwalla, Naureen

    ()

    (IFPRI, International Food Policy Research Institute)

  • Park, Albert

    ()

    (Hong Kong University of Science & Technology)

We provide evidence that promotion incentives influence the effort of public employees by studying China's system of promotions for teachers. Predictions from a tournament model of promotion are tested using retrospective panel data on primary and middle school teachers. Consistent with theory, high wage increases for promotion are associated with better performance, teachers increase effort in years leading up to promotion eligibility, and reduce effort if they are repeatedly passed over for promotion. Evaluation scores are positively associated with teacher time use and with student test scores, diminishing concerns that evaluations are manipulated.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 10547.

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Length: 59 pages
Date of creation: Feb 2017
Handle: RePEc:iza:izadps:dp10547
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  2. Randall Reback & Jonah Rockoff & Heather L. Schwartz, 2014. "Under Pressure: Job Security, Resource Allocation, and Productivity in Schools under No Child Left Behind," American Economic Journal: Economic Policy, American Economic Association, vol. 6(3), pages 207-241, August.
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  8. Ernesto Dal Bó & Frederico Finan & Martín A. Rossi, 2013. "Strengthening State Capabilities: The Role of Financial Incentives in the Call to Public Service," The Quarterly Journal of Economics, Oxford University Press, vol. 128(3), pages 1169-1218.
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  10. Brian A. Jacob & Steven D. Levitt, 2003. "Rotten Apples: An Investigation of the Prevalence and Predictors of Teacher Cheating," The Quarterly Journal of Economics, Oxford University Press, vol. 118(3), pages 843-877.
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  16. 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.
  17. 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.
  18. Illoong Kwon, 2006. "Incentives, wages, and promotions: theory and evidence," RAND Journal of Economics, RAND Corporation, vol. 37(1), pages 100-120, 03.
  19. Han, Li, 2013. "Is centralized teacher deployment more equitable? Evidence from rural China," China Economic Review, Elsevier, vol. 24(C), pages 65-76.
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  21. Hanushek, Eric A. & Rivkin, Steven G., 2006. "Teacher Quality," Handbook of the Economics of Education, Elsevier.
  22. George Baker & Michael Gibbs & Bengt Holmstrom, 1994. "The Internal Economics of the Firm: Evidence from Personnel Data," The Quarterly Journal of Economics, Oxford University Press, vol. 109(4), pages 881-919.
  23. Li, Hongbin & Zhou, Li-An, 2005. "Political turnover and economic performance: the incentive role of personnel control in China," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1743-1762, September.
  24. Paul Glewwe, 2002. "Schools and Skills in Developing Countries: Education Policies and Socioeconomic Outcomes," Journal of Economic Literature, American Economic Association, vol. 40(2), pages 436-482, June.
  25. Nava Ashraf & Oriana Bandiera & Scott Lee, 2014. "Do-gooders and go-getters: career incentives, selection, and performance in public service delivery," STICERD - Economic Organisation and Public Policy Discussion Papers Series 54, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
  26. Gibbs, Michael, 1995. "Incentive compensation in a corporate hierarchy," Journal of Accounting and Economics, Elsevier, vol. 19(2-3), pages 247-277, April.
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  28. 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.
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