IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/8264.html
   My bibliography  Save this paper

Double for nothing ? experimental evidence on an unconditional teacher salary increase in Indonesia

Author

Listed:
  • De Ree,Joppe Jaitze
  • Muralidharan,Karthik
  • Pradhan,Menno Prasad
  • Rogers,F. Halsey

Abstract

How does a large unconditional increase in salary affect the performance of incumbent employees in the public sector? This paper presents experimental evidence on this question in the context of a policy change in Indonesia that led to a permanent doubling of teachers'base salaries. The analysis uses a large-scale, randomized experiment across a representative sample of Indonesian schools that accelerated this pay increase for teachers in treated schools. The findings show that the large pay increase significantly improved teachers'satisfaction with their income, reduced the incidence of teachers holding outside jobs, and reduced self-reported financial stress. Nevertheless, after two and three years, the increase in pay led to no improvement in student learning outcomes. The effects are precisely estimated, making it possible to rule out even modest positive impacts on test scores. The results suggest that unconditional pay increases are unlikely to be an effective policy option for improving the effort and productivity of incumbent employees in public sector settings.

Suggested Citation

  • De Ree,Joppe Jaitze & Muralidharan,Karthik & Pradhan,Menno Prasad & Rogers,F. Halsey, 2017. "Double for nothing ? experimental evidence on an unconditional teacher salary increase in Indonesia," Policy Research Working Paper Series 8264, The World Bank.
  • Handle: RePEc:wbk:wbrwps:8264
    as

    Download full text from publisher

    File URL: http://documents.worldbank.org/curated/en/616961512396126770/pdf/WPS8264.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Luigi Butera & Philip Grossman & Daniel Houser & John List & Marie Villeval, 2020. "A New Mechanism to Alleviate the Crises of Confidence in Science With An Application to the Public Goods GameA Review," Working Papers halshs-02512932, HAL.
    2. Luigi Butera & Philip Grossman & Daniel Houser & John List & Marie-Claire Villeval, 2020. "A New Mechanism to Alleviate the Crises of Confidence in Science - With an Application to the Public Goods Game," Artefactual Field Experiments 00684, The Field Experiments Website.
    3. Camelo, Rafael & Ponczek, Vladimir, 2021. "Teacher Turnover and Financial Incentives in Underprivileged Schools: Evidence from a Compensation Policy in a Developing Country," Economics of Education Review, Elsevier, vol. 80(C).
    4. Isaac Mbiti & Karthik Muralidharan & Mauricio Romero & Youdi Schipper & Constantine Manda & Rakesh Rajani, 2019. "Inputs, Incentives, and Complementarities in Education: Experimental Evidence from Tanzania," The Quarterly Journal of Economics, Oxford University Press, vol. 134(3), pages 1627-1673.
    5. W. Bentley MacLeod & Miguel Urquiola, 2018. "Is Education Consumption or Investment? Implications for the Effect of School Competition," NBER Working Papers 25117, National Bureau of Economic Research, Inc.
    6. Davide Viviano & Jelena Bradic, 2020. "Fair Policy Targeting," Papers 2005.12395, arXiv.org.
    7. Evi Oktavia, 2020. "Vocational Teacher Productivity in Palembang: Education Production Function," Accounting and Finance, Institute of Accounting and Finance, issue 4, pages 112-119, December.
    8. Nagler, Markus & Piopiunik, Marc & West, Martin R., 2019. "Weak Markets, Strong Teachers: Recession At Career Start and Teacher Effectiveness," Rationality and Competition Discussion Paper Series 137, CRC TRR 190 Rationality and Competition.
    9. Chatib Basri & Hal Hill, 2020. "Making Economic Policy in a Democratic Indonesia: The First Two Decades," Asian Economic Policy Review, Japan Center for Economic Research, vol. 15(2), pages 214-234, July.
    10. Bold, Tessa & Kimenyi, Mwangi & Mwabu, Germano & Ng’ang’a, Alice & Sandefur, Justin, 2018. "Experimental evidence on scaling up education reforms in Kenya," Journal of Public Economics, Elsevier, vol. 168(C), pages 1-20.
    11. Greaves, Ellen & Sibieta, Luke, 2019. "Constrained optimisation? Teacher salaries, school resources and student achievement," Economics of Education Review, Elsevier, vol. 73(C).
    12. Juan F. Castro & Paul Glewwe & Ricardo Montero, 2019. "Work With What You’ve Got: Improving Teachers’ Pedagogical Skills at Scale in Rural Peru," Working Papers 158, Peruvian Economic Association.
    13. Pipit Novita, 2019. "What Happened to Initial Teacher Education in Indonesia? AReview of the Literature," European Journal of Social Sciences Education and Research Articles, European Center for Science Education and Research, vol. 6, EJSER Sep.
    14. Eunice S. Han, 2020. "The Myth of Unions’ Overprotection of Bad Teachers: Evidence from the District–Teacher Matched Data on Teacher Turnover," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 59(2), pages 316-352, April.
    15. Berlinski, Samuel & Ramos, Alejandra, 2020. "Teacher mobility and merit pay: Evidence from a voluntary public award program," Journal of Public Economics, Elsevier, vol. 186(C).
    16. Karthik Muralidharan & Paul Niehaus, 2017. "Experimentation at Scale," Journal of Economic Perspectives, American Economic Association, vol. 31(4), pages 103-124, Fall.
    17. World Bank, 2018. "Indonesia Economic Quarterly, June 2018," World Bank Other Operational Studies 29921, The World Bank.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:8264. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi). General contact details of provider: https://edirc.repec.org/data/dvewbus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.