Fair Merit Pay Schemes, Part IV

From the latest issue of the Journal of Public Economics. 

Individual teacher incentives and student performance
David N. Figlio and Lawrence W. Kenny
This paper is the first to systematically document the relationship between individual teacher performance incentives and student achievement using the United States data. We combine data from the National Education Longitudinal Survey on schools, students, and their families with our own survey conducted in 2000 regarding the use of teacher incentives. This survey on teacher incentives has unique data on frequency and magnitude of merit raises and bonuses, teacher evaluation, and teacher termination. We find that test scores are higher in schools that offer individual financial incentives for good performance. Moreover, the estimated relationship between the presence of merit pay in teacher compensation and student test scores is strongest in schools that may have the least parental oversight. The association between teacher incentives and student performance could be due to better schools adopting teacher incentives or to teacher incentives eliciting more effort from teachers; it is impossible to rule out the former explanation with our cross sectional data.

OK, I admit that we don’t know how ‘fair’ these schemes were. But as the authors point out, we don’t have a whole lot of evidence on the effect of merit pay on student performance, and this is plausibly the best study thus far on the US. The effects are statistically significant, but not huge (1-3 NAEP points on a test where the standard deviation is 33 points). As the authors point out, having merit pay at your school is comparable in magnitude to increasing maternal education by approximately 3 years.

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3 Responses to Fair Merit Pay Schemes, Part IV

  1. Fred Argy says:

    Andrew, thanks. If the positive effects are “not huge” and if they could be simply due to “bretter schools adopting teacher incentives” rather than because the incentives elicit more effort from teachers, does the study (by itself) really justify disruptive policy reform which could have a significant human cost in the short term?

  2. Slim says:

    Looks like Bishop’s plan is on the back-burner for the moment, and I can’t rally see her pushing it as an election issue, because I’d guess most punters just reckon teachers should be paid more to get on with the job.

    My wrap-up at The Dogs Bollocks.

  3. ChrisPer says:

    I’m with Slim. “punters just reckon teachers should be paid more to get on with the job.”

    Sadly the job is badly hampered by inappropriate theories, PC and bureaucracy.

    Can’t help but think that schools trying merit pay have to have already got a staff committed to improvement, and in part prepared to look at non-PC ideas for change. The variables are not independent, and if they would try it they might be self-selecting other variables. This might be another lone like the ‘lighting study’ too, where the mere fact of attempted improvement changed the teachers and hence student attitudes.

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