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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, 2017. "Measuring Quality for Use in Incentive Schemes: The Case of "Shrinkage" Estimators," University of Western Ontario, Centre for Human Capital and Productivity (CHCP) Working Papers 201725, University of Western Ontario, Centre for Human Capital and Productivity (CHCP).

    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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