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Teacher Performance Incentives and Student Outcomes

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Abstract

This paper reviews the evidence on the effectiveness of individual merit pay systems for teachers on student achievement, and it presents new empirical results based on a system established within a collective bargaining environment. While many merit pay systems have been established in school districts across the U.S., very little empirical evidence concerning their influence on student achievement exists. A natural experiment arose in a county in which one high school piloted a merit pay system that rewarded student retention and student evaluations of teachers while another comparable high school maintained a traditional compensation system. A difference-in-differences analysis implies that this system had no effect on grade point averages, reduced the percentage of students who dropped out of courses, reduced average daily attendance, and increased the percentage of students who failed. The outcomes of this merit pay system illustrate the difficulty of instituting such a compensation system in schools. The goal of the system was to increase student retention. A student was considered to be retained in a class if the student was present during a randomly selected day of the last week of classes. The system "worked" by this measure because the school experienced a significant reduction in course noncompleters. However it is not clear that this measure was correlated with student achievement or even average attendance, and indeed, neither of these outcomes were improved.
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Suggested Citation

  • Randall W. Eberts & Kevin Hollenbeck & Joe A. Stone, "undated". "Teacher Performance Incentives and Student Outcomes," Upjohn Working Papers and Journal Articles rwekhjs2002, W.E. Upjohn Institute for Employment Research.
  • Handle: RePEc:upj:weupjo:rwekhjs2002
    Note: Appears in Journal of Human Resouorces 37(4): 913-927
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    1. Eberts, Randall W & Stone, Joe A, 1991. "Unionization and Cost of Production: Compensation, Productivity, and Factor-Use Effects," Journal of Labor Economics, University of Chicago Press, vol. 9(2), pages 171-185, April.
    2. Eberts, Randall W & Stone, Joe A, 1986. "Teacher Unions and the Cost of Public Education," Economic Inquiry, Western Economic Association International, vol. 24(4), pages 631-643, October.
    3. Canice Prendergast, 1999. "The Provision of Incentives in Firms," Journal of Economic Literature, American Economic Association, vol. 37(1), pages 7-63, March.
    4. Caroline Minter Hoxby, 1996. "How Teachers' Unions Affect Education Production," The Quarterly Journal of Economics, Oxford University Press, vol. 111(3), pages 671-718.
    5. Dale Ballou & Michael Podgursky, 1996. "Teacher Pay and Teacher Quality," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number tptq, November.
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    Cited by:

    1. Oscar Mitnik, 2008. "How do Training Programs Assign Participants to Training? Characterizing the Assignment Rules of Government Agencies for Welfare-to-Work Programs in California," Working Papers 0907, University of Miami, Department of Economics.
    2. Jaag, Christian, 2006. "Teacher Incentives," MPRA Paper 340, University Library of Munich, Germany.
    3. Bond, Timothy N. & Mumford, Kevin J., 2018. "Teacher Performance Pay in the United States: Incidence and Adult Outcomes," IZA Discussion Papers 11432, Institute for the Study of Labor (IZA).
    4. Jones, Michael D., 2013. "Teacher behavior under performance pay incentives," Economics of Education Review, Elsevier, vol. 37(C), pages 148-164.
    5. Anna Makles & Kerstin Schneider, 2017. "Extracurricular educational programs and school readiness: evidence from a quasi-experiment with preschool children," Empirical Economics, Springer, vol. 52(4), pages 1181-1204, June.
    6. World Bank, 2009. "Findings from the Bhutan Learning Quality Survey," World Bank Other Operational Studies 17940, The World Bank.
    7. Helbach, Christoph & Keldenich, Klemens, 2012. "Teaching in the Lab: Financial Incentives in the Education Process," Ruhr Economic Papers 328, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    8. Vikström, Johan, 2009. "Cluster sample inference using sensitivity analysis: the case with few groups," Working Paper Series 2009:15, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    9. Martins, Pedro S., 2009. "Individual Teacher Incentives, Student Achievement and Grade Inflation," IZA Discussion Papers 4051, Institute for the Study of Labor (IZA).
    10. Christoph Helbach & Klemens Keldenich, 2012. "Teaching in the Lab: Financial Incentives in the Education Process," Ruhr Economic Papers 0328, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    11. Martin, Stephanie M., 2010. "The determinants of school district salary incentives: An empirical analysis of, where and why," Economics of Education Review, Elsevier, vol. 29(6), pages 1143-1153, December.
    12. Eleonora Fichera & James Banks & Luigi Siciliani & Matt Sutton, 2017. "Does Patient Health Behaviour respond to Doctor’s Effort?," Department of Economics Working Papers 62/17, University of Bath, Department of Economics.
    13. Christian Jaag, 2005. "Hidden Teacher Effort in Educational Production: Monitoring vs. Merit Pay," HEW 0503003, University Library of Munich, Germany.
    14. C. Kirabo Jackson, 2010. "A Little Now for a Lot Later: A Look at a Texas Advanced Placement Incentive Program," Journal of Human Resources, University of Wisconsin Press, vol. 45(3).
    15. repec:zbw:rwirep:0328 is not listed on IDEAS
    16. Calero, Jorge & Escardíbul, J. Oriol, 2016. "Proceso educativo y resultados del alumnado nativo y de origen inmigrante en España. Un análisis basado en PISA-2012/Educational Process and Native and Immigrant Students? Results. An Analysis Based o," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 34, pages 413-438, Mayo.
    17. Figlio, David N. & Kenny, Lawrence W., 2007. "Individual teacher incentives and student performance," Journal of Public Economics, Elsevier, vol. 91(5-6), pages 901-914, June.
    18. Atkinson, Adele & Burgess, Simon & Croxson, Bronwyn & Gregg, Paul & Propper, Carol & Slater, Helen & Wilson, Deborah, 2009. "Evaluating the impact of performance-related pay for teachers in England," Labour Economics, Elsevier, vol. 16(3), pages 251-261, June.
    19. Hasnain, Zahid & Manning, Nick & Pierskalla Henryk, 2012. "Performance-related pay in the public sector : a review of theory and evidence," Policy Research Working Paper Series 6043, The World Bank.
    20. Emiliana Vegas & Ilana Umansky, 2005. "Improving Teaching and Learning through Effective Incentives : What Can We Learn from Education Reforms in Latin America?," World Bank Other Operational Studies 8694, The World Bank.
    21. Marcello Sartarelli, 2011. "Do Performance Targets Affect Behaviour? Evidence from Discontinuities in Test Scores in England," DoQSS Working Papers 11-02, Department of Quantitative Social Science - UCL Institute of Education, University College London.
    22. Casey Ichniowski & Kathryn L. Shaw, 2009. "Insider Econometrics: Empirical Studies of How Management Matters," NBER Working Papers 15618, National Bureau of Economic Research, Inc.
    23. Shaw, Kathryn, 2009. "Insider econometrics: A roadmap with stops along the way," Labour Economics, Elsevier, vol. 16(6), pages 607-617, December.
    24. Heutel, Garth, 2009. "Testing implications of a tournament model of school district salary schedules," Economics of Education Review, Elsevier, vol. 28(1), pages 143-151, February.
    25. Ellen Greaves & Luke Sibieta, 2014. "Estimating the effect of teacher pay on pupil attainment using boundary discontinuities," IFS Working Papers W14/03, Institute for Fiscal Studies.

    More about this item

    Keywords

    EDUCATION and TRAINING; K-12 Education; Teachers and compensation;

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education

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