Teacher Performance and Accountability Incentives

This paper documents a new empirical regularity: teacher value-added increases within-teacher when accountability incentives are strengthened. That finding motivates a strategy to separate value-added into incentive-varying teacher effort and incentive-invariant teacher ability, combining rich longitudinal data with exogenous incentive-policy variation from North Carolina. Our estimates indicate that teacher effort and ability both raise current and future test scores, with ability having stronger effects. These estimates feed into a framework for comparing the cost-effectiveness of alternative education policies. For illustration, we show incentive-oriented reforms can outperform policies targeting teacher ability, given their potential to influence all teachers rather than a subset.