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The Potential Output Gains from Using Optimal Teacher Incentives: An Illustrative Calibration of a Hidden Action Model

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  • Mehta, Nirav

Abstract

This paper examines the potential output gains from the implementation of optimal teacher incentive pay schemes, by calibrating the H¨olmstrom and Milgrom (1987) hidden action model using data from Muralidharan and Sundararaman (2011), a teacher incentive pay experiment implemented in Andhra Pradesh, India. Findings suggest that the introduction of optimal individual incentive-pay schemes could result in very large increases in output, about six times the size of the (significant) results obtained in the experiment.

Suggested Citation

  • Mehta, Nirav, 2018. "The Potential Output Gains from Using Optimal Teacher Incentives: An Illustrative Calibration of a Hidden Action Model," EconStor Preprints 180848, ZBW - Leibniz Information Centre for Economics.
  • Handle: RePEc:zbw:esprep:180848
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    Cited by:

    1. Nirav Mehta, 2019. "Measuring quality for use in incentive schemes: The case of “shrinkage” estimators," Quantitative Economics, Econometric Society, vol. 10(4), pages 1537-1577, November.
    2. Michela M. Tincani, 2021. "Teacher labor markets, school vouchers, and student cognitive achievement: Evidence from Chile," Quantitative Economics, Econometric Society, vol. 12(1), pages 173-216, January.

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    More about this item

    Keywords

    empirical contracts; teacher incentive schemes;

    JEL classification:

    • I2 - Health, Education, and Welfare - - Education
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J4 - Labor and Demographic Economics - - Particular Labor Markets

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