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Teacher behavior under performance pay incentives
Institution:1. HBS, United States;2. NBER, United States;3. Department of Economics, LSE, United Kingdom;4. STICERD, LSE, United Kingdom;5. Department of Economics, Tufts University, United States;1. Center for Experimental Economics in Education, Laboratory of Modern Teaching Technology of Ministry of Education, Shaanxi Normal University, West Chang''an Road No. 620, Chang''an District, Xi''an 710119, China;2. Stanford University, Stanford, CA, United States;3. The Univerisity of North Carolina at Chapel hill, NC, United States;4. Rural Education Action Program, Freeman Spogli Institute for International Studies, Stanford University, Stanford, CA, United States;1. Massachusetts Institute of Technology, United States;2. BREAD, United States;3. NBER, United States;4. CEPR, United Kingdom;5. Stanford University, United States;6. Harvard University, United States;7. Brookings, United States;8. CGD, United States;1. Annenberg Institute, Brown University, Providence, RI, United States;2. Curry School of Education, University of Virginia, Charlottesville, VA, United States
Abstract:Over the last decade many districts implemented performance pay incentives to reward teachers for improving student achievement. Economic theory suggests that these programs could alter teacher work effort, cooperation, and retention. Because teachers can choose to work in a performance pay district that has characteristics correlated with teacher behavior, I use the distance between a teacher's undergraduate institution and the nearest performance pay district as an instrumental variable. Using data from the 2003 and 2007 waves of the Schools and Staffing Survey, I find that teachers respond to performance pay incentives by working fewer hours per week. Performance pay also decreases participation in unpaid cooperative school activities, while there is suggestive evidence that teacher turnover decreases. The treatment effects are heterogeneous; male teachers respond more positively than female teachers. In Florida, which restricts state performance pay funding to individual teachers, I find that work effort and teacher turnover increase.
Keywords:Teacher salaries  Productivity
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