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 the German university sector. Starting in the 1990‘s, the federal states of Germany introduced incentive-based funding systems in order to increase universities‘ performance and efficiency. We estimate the eff ects of this reform on four common outcome indicators of the funding models: The number of students and graduates, which are supposed to measure teaching performance, and the number of PhD graduates and the amount of third-party funds, which quantify research output. Using a difference-in-differences estimator, our results suggest that for increasing the outcomes in teaching, a weak incentive is sucient while the research outputs are only aected if the incentive is strong enough. We further identify different responses by university types, which shows that the results are mainly driven by technical colleges. According to our findings, it is crucial to design the funding models carefully to provide the “right” incentives and hence to achieve the underlying goal of the reform
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- Bauer, Thomas K. & Grave, Barbara S., 2011.
"Performance-related Funding of Universities – Does more Competition Lead to Grade Inflation?,"
Ruhr Economic Papers
288, Rheinisch-Westfälisches Institut für Wirtschaftsforschung (RWI), Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
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"Does performance related pay for teachers improve student performance? Some evidence from India,"
CSAE Working Paper Series
2002-06, Centre for the Study of African Economies, University of Oxford.
- Kingdon, Geeta Gandhi & Teal, Francis, 2007. "Does performance related pay for teachers improve student performance? Some evidence from India," Economics of Education Review, Elsevier, vol. 26(4), pages 473-486, August.
- Francis Teal & Geeta Kingdon, 2005. "Does performance related pay for teachers improve student performance? Some evidence from India," Economics Series Working Papers GPRG-WPS-014, University of Oxford, Department of Economics.
- Geeta Kingdon & Francis Teal, 2004. "Does performance related pay for teachers improve student performance? Some evidence from India," Development and Comp Systems 0409009, EconWPA.
- Reback, Randall, 2008.
"Teaching to the rating: School accountability and the distribution of student achievement,"
Journal of Public Economics,
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- Randall Reback, 2006. "Teaching to the Rating: School Accountability and the Distribution of Student Achievement," Working Papers 0602, Barnard College, Department of Economics.
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