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Could do Better: The Effectiveness of Incentives and Competition in Schools

Author

Listed:
  • Gianni De Fraja

    (University of York (UK) - Department of Economics
    Centre for Economic Policy Research (CEPR))

  • Pedro Landeras

    (University of Cantabria - Department of Economics)

Abstract

This paper studies the effects of incentive mechanisms and of the competitive environment on the interaction between schools and students, in a set-up where the students' educational attainment depends on their peer group, on their effort, and on the quality of the school's teaching. We show that increasing the power of the incentive scheme and the effectiveness of competition may have the counterintuitive effect of lowering the students' effort, with ambiguous effects on their attainment. In a simple dynamic set-up, where the reputation of the schools affects recruitment, we show that increased competition leads to segregation of pupils by ability.

Suggested Citation

  • Gianni De Fraja & Pedro Landeras, 2004. "Could do Better: The Effectiveness of Incentives and Competition in Schools," CEIS Research Paper 48, Tor Vergata University, CEIS.
  • Handle: RePEc:rtv:ceisrp:48
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    References listed on IDEAS

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    More about this item

    Keywords

    Students effort; Schools quality; Peer-group effect; Incentives;
    All these keywords.

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods

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