Incentives and teacher effort : further evidence from a developing country

Few would contest that teachers are a very important determinant of whether students learn in school and how to improve teacher performance has been the focus of much policy debate in rich and poor countries. This paper examines how incentives, both pecuniary and non-pecuniary, correlate with teacher effort. Using school survey data from Lao PDR, we estimate new measures of teacher effort including the number of hours that teachers spend preparing for classes and teacher provision of private tutoring classes outside of class hours. Estimation results indicate that higher teacher effort is associated with non-pecuniary incentives such as greater teacher autonomy over teaching materials, and monitoring mechanism such as the existence of an active parent-teacher association and ability of school principals to dismiss teachers. Methodologically, this paper provides a detailed derivation of a simultaneous OLS-probit model with school random effects that can jointly estimate teacher work hours and tutoring provision.