Fair Merit Pay Schemes, Part IX

(xposted @ Core)

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.)

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2 Responses to Fair Merit Pay Schemes, Part IX

  1. conrad says:

    As for now, I’m going to assume that Indian results are not generalizable to Australia. It would be good to see similar studies from places like Australia — especially if pay is going to be increased 30%. In addition, if pay is increased 30%, presumably someone has to pay for it, so in a game where total resources are fixed, I’d also like to see if there are other longer term negative effects cause by lower pay on those that don’t get the incentive.

  2. ChrisPer says:

    I am very cynical about merit pay for teachers because I believe that it would be corrupted by political behaviour. I believe professionals respond better to good coaching combined with peer recognition. An environment that did that well maybe could also develop pay incentives transparently through 360 degree performance reviews or similar.

    From what the teachers I know tell me, the incentive and professional development systems at present are fairly dysfunctional.

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