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Incentive Design in Education: An Empirical Analysis

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  • Hugh Macartney
  • Robert McMillan
  • Uros Petronijevic

Abstract

While incentive schemes to elicit greater effort in organizations are widespread, the incentive strength-effort mapping is difficult to ascertain in practice, hindering incentive design. We propose a new semi-parametric method for uncovering this relationship in an education context, using exogenous incentive variation and rich administrative data. The estimated effort response forms the basis of a counterfactual approach tracing the effects of various accountability systems on the full distribution of scores. We show higher average performance comes with greater score dispersion for a given accountability scheme, and that incentive designs not yet enacted can improve performance further, relevant to education reform.

Suggested Citation

  • Hugh Macartney & Robert McMillan & Uros Petronijevic, 2015. "Incentive Design in Education: An Empirical Analysis," NBER Working Papers 21835, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:21835
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    References listed on IDEAS

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    1. Esther Duflo & Pascaline Dupas & Michael Kremer, 2011. "Peer Effects, Teacher Incentives, and the Impact of Tracking: Evidence from a Randomized Evaluation in Kenya," American Economic Review, American Economic Association, vol. 101(5), pages 1739-1774, August.
    2. Simon Burgess & Carol Propper & Helen Slater & Deborah Wilson, 2005. "Who wins and who loses from school accountability? The distribution of educational gain in English secondary schools," The Centre for Market and Public Organisation 05/128, Department of Economics, University of Bristol, UK.
    3. Julie Berry Cullen & Randall Reback, 2006. "Tinkering Toward Accolades: School Gaming Under a Performance Accountability System," NBER Working Papers 12286, National Bureau of Economic Research, Inc.
    4. David J. Deming & Sarah Cohodes & Jennifer Jennings & Christopher Jencks, 2016. "School Accountability, Postsecondary Attainment, and Earnings," The Review of Economics and Statistics, MIT Press, vol. 98(5), pages 848-862, December.
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    Cited by:

    1. Hugh Macartney & Robert McMillan & Uros Petronijevic, 2018. "Teacher Performance and Accountability Incentives," Working Papers tecipa-610, University of Toronto, Department of Economics.

    More about this item

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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