Fair Merit Pay Schemes, Part IX

(xposted @ andrewleigh.com)

One of the most rigorous studies of teacher merit pay has just reported its two-year results. The findings look pretty convincing, and the researchers don’t seem to have found much support for the kinds of perverse impacts that many of us have worried about.

Teacher Performance Pay: Experimental Evidence from India (gated, sorry) 
Karthik Muralidharan & Venkatesh Sundararaman
Performance pay for teachers is frequently suggested as a way of improving education outcomes in schools, but the theoretical predictions regarding its effectiveness are ambiguous and the empirical evidence to date is limited and mixed. We present results from a randomized evaluation of a teacher incentive program implemented across a large representative sample of government-run rural primary schools in the Indian state of Andhra Pradesh. The program provided bonus payments to teachers based on the average improvement of their students’ test scores in independently administered learning assessments (with a mean bonus of 30% of monthly pay). At the end of two years of the program, students in incentive schools performed significantly better than those in control schools by 0.28 and 0.16 standard deviations in math and language tests respectively. They scored significantly higher on "conceptual" as well as "mechanical" components of the tests, suggesting that the gains in test scores represented an actual increase in learning outcomes. Incentive schools also performed better on subjects for which there were no incentives, suggesting positive spillovers. Group and individual incentive schools performed equally well in the first year of the program, but the individual incentive schools outperformed in the second year. Incentive schools performed significantly better than other randomly-chosen schools that received additional schooling inputs of a similar value.

(I reported on this project’s first-year findings in 2007.)

1 thought on “Fair Merit Pay Schemes, Part IX”


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    One of the known problems with student performance studies that evaluate teacher performance is the non-random assignment and retention of students in evaluated classrooms and schools. Teachers and administrators have incentives to select students most responsive to the change in school inputs.
    The abstract states,” Incentive schools also performed better on subjects for which there were no incentives, suggesting positive spillovers. Group and individual incentive schools performed equally well in the first year of the program, but the individual incentive schools outperformed in the second year. Incentive schools performed significantly better than other randomly-chosen schools that received additional schooling inputs of a similar value.”
    The above section from the abstract indicates that this maybe a problem also in the study. The spillover effect mentioned and the increased performance of incentive schools versus schools that received similar additional inputs indicates that the student populations may possess different characteristics during the period of evaluation.
    n.

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